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Ruling
Subject: Medical expenses tax offset
Question
Are you entitled to the medical expenses tax offset for the cost incurred for theatre/accommodation at a medical facility while undergoing in vitro fertilisation (IVF) treatment?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
You are an Australian resident for tax purposes.
You incurred expenses for theatre/accommodation while undergoing IVF treatment.
You were required to stay at the facility for two hours.
The treatment was administered by a legally qualified medical practitioner.
You received no re-imbursement from either Medicare or a private health fund for the expenses.
The total unreimbursed medical expenses incurred in the 2011 financial year were more than $2000.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P.
Reasons for decision
A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA1936), where the taxpayer incurs medical expenses for themselves or a dependant who is an Australian resident.
For the 2011 financial year the medical expenses 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 $2,000. The tax offset is 20% of the amount by which the rebatable amount exceeds $2,000.
The term medical expense is defined in subsection 159(4) of the ITAA 1936. Paragraph (a) of 159P(4) provides that payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation are medical expenses.
Taxation Ruling IT 2359 paragraph 8 expresses the Commissioner's view with respect to IVF treatment:
Payments to a legally qualified medical practitioner or a public or private hospital for treatment under an In Vitro Fertilization program fall within the definition of medical expenses in sub-section 159P(4) of the Act as being in respect of an illness or an operation. Accordingly, the payments, less any reimbursements, qualify as rebatable amounts.
Application to your circumstances
You are a resident of Australia for tax purposes. You received treatment at an IVF clinic. The treatment was performed by a legally qualified medical practitioner.
Consequently, the unreimbursed medical expenses you incurred for your IVF treatment are eligible medical expenses for medical expenses tax offset purposes.