Payment to recovery house

T1
1

Due to drug or drinking habits if someone spends some time at the recovery house, is the payment made to the recovery house claimable on individual’s tax return. is it claimable as med Exp?

2

Depending on the circumstances it might be claimable under drug rehabilitation facilities. I have successfully gotten these type of receipts to be accepted by the reviewers when they want copies of the medical receipts. If it’s an official program that issues receipts you probably have a good chance. If it’s just a half way house type of thing with little to nothing in the way of rehabilitation counseling then probably not.

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3

I had a client who had paid about $10,000 for her adult son to go to drug rehab. CRA didn’t have a problem with the medical expense. The problem was that the son hadn’t/wouldn’t file a tax return for himself so the medical expense couldn’t be transferred to the mother. I had another client who paid about $60,000 for her brother to go to re-hab. CRA reviewed that medical expense transfer and allowed it but we had done the brother’s tax return.

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4

That would be eligible for the METC.

Regards

Jim

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5

Thanks everyone for your time and sharing your knowledge.

6

one more question regarding this. My client paid all the expenses in four monthly payments and received four different invoices. Each invoice is more than $5000.00 and because client was in rehabilitation facilities, the box 14 on T4 is very small amount. I am thinking it is more beneficial for the client to claim only one invoice in 2019 tax and all the others in 2020 tax return. As the medical expenses are claimable in the last 12 months as long as 12th month is in the current tax year. Any suggestion?

7

It sounds as though that would be fine since the actual medical services were being billed monthly as they were being provided. That’s different from your client paying an invoice in four instalments. You may want to check to see if claiming the medical expenses in 2019 provides a refundable medical expense supplement.

8

Possibly you are wishing to consider an attendant care claim pursuant to S118.2(2)(b.1) which is limited in amount and as to the designations of the patient?
S118.2(2)(b.1)(i) refers to the additional requirement of meeting the requirements to qualify for a deduction under S118.3 (DTC).
You may wish to consider which section(s) are the most advantageous in the particular circumstances of the taxpayer.

9

I successfully had rehab claim approved as a medical expense plus medical travel with a support person even after CRA review. I needed to provide the following:-

  1. Medical doctor letter supporting why and what was required. This included spouse to be in attendance for three sessions, why this level of rehab, and why out of country. (third time in rehab + other attempts failed + no comparable facilities with available spots in Canada within a month of entry)
  2. Billing from rehab facility.
  3. Proof of payment per credit card receipt.
  4. Proof of medical travel.
  5. Proof of completion

In this case the issue was so severe that the individual had been previously hospitalized in Canada and was considered a suicide watch candidate based on several prior attempts. So a Disability Tax Credit application was completed and approved.