Alberta taxpayer tries to assert parking prices as a clinical expense

Jamie Golombek: Get started accumulating the receipts you’ll want when you’re hoping to assert the clinical expense tax credit score

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It’s too early to start submitting your 2022 non-public tax go back — digital submitting of T1 returns most effective opens on Feb. 20 — however now could be the very best time to start out accumulating the receipts you’ll want, together with the ones associated with clinical bills when you’re hoping to assert the clinical expense tax credit score (METC).

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The METC is a non-refundable credit score value 15 in step with cent federally, with each and every province and territory providing its personal further credit score. Federally, you’ll declare an METC equipped your overall circle of relatives’s clinical bills exceed a minimal threshold equivalent to the lesser of 3 in step with cent of your web source of revenue or $2,635 (for 2023). The provincial/territorial minimal source of revenue thresholds range moderately.

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The tax regulations help you declare an METC for bills you incurred for your self, your partner or spouse, and your children beneath age 18. To qualify, the clinical provider or merchandise should be in particular indexed as an “eligible” clinical expense beneath the Source of revenue Tax Act. In positive restricted scenarios, you may additionally be entitled to deduct the price of “affordable shuttle bills” equivalent to transportation, foods and lodging if you must shuttle to acquire those clinical services and products.

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However to be able to deduct transportation as a clinical expense, the clinical services and products should now not be to be had in the area people, where of shuttle should be situated greater than 40 kilometres from the affected person’s house (80 km if you wish to deduct shuttle bills instead of transportation), the course taken should be an immediate one and “it should be affordable for the taxpayer to shuttle to that position to acquire the services and products.” In positive circumstances, a spouse’s shuttle bills might also qualify for an METC equipped a clinical practitioner has qualified the taxpayer can’t shuttle with out help.

A tax case determined previous in January concerned an Alberta taxpayer’s try to declare an METC of $853 for clinic parking bills that his spouse, a retired nurse, paid right through the 2018 tax 12 months. In that 12 months, the taxpayer’s spouse travelled thrice a week to acquire kidney dialysis remedy at an Edmonton clinic. On a dialysis day, the taxpayer’s spouse would pressure from their house to the clinic, the place she would park the automobile, after which, upon of entirety of her remedy consultation, pressure house, which used to be roughly 22 km from the clinic.

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The taxpayer testified that those dialysis remedies “had been life-saving and with out identical his partner would have died.” The taxpayer equated her parking expense to a clinical remedy expense as she wanted with the intention to park her automotive to obtain remedies and, thus, they must correctly be allowed as a clinical expense for the needs of saying an METC.

The taxpayer used to be necessarily difficult the 80-km distance requirement within the Tax Act as being discriminatory and opposite to the Canadian Constitution of Rights and Freedoms. “My spouse has to park to acquire dialysis,” the taxpayer defined. “(The regulation) discriminates in opposition to individuals who must shuttle lower than 80 km for important clinical remedy” because it most effective lets in such parking bills to be deducted for those who shuttle more than 80 km to acquire remedy.

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The pass judgement on grew to become to the wording of the constitution itself, which, beneath the Equality Rights heading, states: “Each particular person is equivalent earlier than and beneath the regulation and has the precise to the equivalent coverage and equivalent good thing about the regulation with out discrimination and, specifically, with out discrimination in accordance with race, nationwide or ethnic beginning, color, faith, intercourse, age or psychological or bodily incapacity.”

The pass judgement on stated this used to be now not a case the place there used to be any discrimination between people because it pertains to claiming an METC. It’s true that the Tax Act specifies a limitation of “now not lower than 80 km,” however this limitation isn’t in accordance with, neither is it carried out at the foundation of, variations of people themselves. It’s carried out at the foundation of whether or not any particular particular person travels lower than 80 km to acquire clinical services and products. In different phrases, the act, which makes a difference for one-way shuttle distances of “now not lower than 80 km applies similarly to any and all people in the hunt for to assert a METC.”

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The pass judgement on famous Parliament selected to acknowledge clinic parking prices (being a part of “affordable shuttle bills”) as a clinical expense for one-way shuttle of now not lower than 80 km. However that doesn’t imply Parliament is discriminating via now not granting the similar reputation of parking prices for one-way shuttle of any lesser distance. In any case, Parliament is entitled to make such distinctions within the act for causes equivalent to “protective the fisc” with out it constituting discrimination.

“Parliament is beneath no legal responsibility to create a specific receive advantages,” the Ideal Courtroom of Canada has in the past said, “(and) is unfastened to focus on the social techniques it needs to fund as an issue of public coverage, equipped the convenience itself isn’t conferred in a discriminatory approach.”

The pass judgement on, due to this fact, pushed aside the taxpayer’s declare for the METC, however selected to not award any prices to the Crown taking into account the instances.

Jamie Golombek, CPA, CA, CFP, CLU, TEP, is the managing director, Tax & Property Making plans with CIBC Non-public Wealth in Toronto.


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