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Edited version of private ruling
Authorisation Number: 1011612890835
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Ruling
Subject: Medical expenses tax offset
Are you entitled to claim the medical expenses offset for surgery?
Yes.
This ruling applies for the following period:
Year ended 30 June 2010
The scheme commenced on:
1 July 2009
Relevant facts
You under went surgery.
Medicare paid a rebate for the surgery
A specialist carried out the surgery.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P.
Income Tax Assessment Act 1936 Subsection 159P(4).
Reasons for decision
A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer incurs medical expenses for themselves or a dependant who is an Australian resident. The medical expense tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds $1,500. The tax offset is 20% of the amount by which the net medical expenses exceeds $1,500.
Subsection 159P(4) defines 'medical expenses' to include payments to a legally qualified medical practitioner, or a public or private hospital, in respect of an illness or operation.
Paragraph 159P(4) of the ITAA 1936 defines 'ineligible medical expenses' as payments to a legally qualified practitioner, nurse or chemist, or a public or private hospital, in respect of a cosmetic operation that is not a professional service for which a Medicare benefit is payable under Part II of the Health Insurance Act 1973.
Taxation Determination TD 94/5 states that where cosmetic surgery is performed by a legally qualified medical practitioner, it falls within the meaning of 'operation' for medical expense purposes.
In your case, you have had the surgery performed by a legally qualified medical practitioner.
As a Medicare benefit was payable in respect of the surgery, it is not an 'ineligible medical expense'.
Therefore, as your net medical expenses exceeded $1500, you are entitled to a medical expense tax offset under section 159P of the ITAA 1936.
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