Are Fertility Treatments Tax-Deductible?

Are fertility treatments tax-deductible?

Yes, some fertility-related costs can be deductible as medical expenses if they are part of diagnosis, cure, mitigation, treatment, or prevention of disease, or are used to affect a body function IRS Publication 502. The IRS says medical expenses are deducted on Schedule A, which means you must itemize to claim them, and only the amount above 7.5% of your adjusted gross income (AGI) can be deducted IRS Publication 502.

What is the 7.5% AGI threshold?

The IRS threshold is the amount of your total qualifying medical and dental expenses that is more than 7.5% of your AGI. In plain language, you add up the eligible expenses you paid during the year, then subtract 7.5% of your AGI; the part left over may be deductible if you itemize IRS Publication 502. If your expenses do not rise above that floor, there is no medical expense deduction for the year under this rule.

What fertility-related costs can qualify?

Publication 502 includes “fertility enhancement” among the medical expenses that can be included, which is the IRS’s broad category for fertility-related treatment costs IRS Publication 502. The IRS also defines medical expenses as costs for diagnosis, cure, mitigation, treatment, or prevention of disease, and for affecting any part or function of the body IRS Publication 502. That definition is why fertility care may qualify when it is tied to medical treatment rather than general wellness.

What other treatment costs does the IRS list as medical expenses?

The IRS specifically lists a wide range of treatment-related expenses as medical care, including fees paid to doctors and other medical practitioners, hospital care, acupuncture, treatment for alcohol or drug addiction, smoking-cessation programs, prescription medicines and insulin, and transportation that is primarily for and essential to medical care IRS Publication 502. In fertility care, that means the deductible bucket can be broader than a single procedure fee. It can include related medical services and certain travel costs when they meet the IRS medical-care standard IRS Publication 502.

Which fertility-related costs do not qualify?

Not every expense connected to trying to build a family is deductible. The IRS says expenses that are merely beneficial to general health do not count as medical expenses, and it gives examples such as vitamins or a vacation IRS Publication 502. Publication 502 also says you generally cannot deduct medical expenses paid by insurance or other sources, and the deduction does not include expenses already compensated by insurance or otherwise IRS Publication 502.

When can you count the expense?

You generally can include only the medical and dental expenses you paid during the tax year. The IRS says that if you pay by check, the payment date is generally when you mail or deliver the check; for online or pay-by-phone payments, it is the date shown by the financial institution; and for credit cards, the expense counts in the year the charge is made, not when you later pay the card bill IRS Publication 502. That timing rule matters when fertility bills cross over from one calendar year to the next.

Whose fertility or medical expenses can you include?

You can generally include medical expenses you pay for yourself, your spouse, and your dependent if the person was your spouse or dependent either when the services were provided or when you paid for them IRS Publication 502. The IRS also says a dependent for this deduction generally must meet the rules for a qualifying child or qualifying relative and be a U.S. citizen or national, or a resident of the United States, Canada, or Mexico, with a limited exception for an adopted child living with you as a member of your household IRS Publication 502.

How does insurance affect the deduction?

Only unreimbursed expenses count. The IRS says you cannot include amounts paid by insurance companies or other sources, whether the payment goes to you, the patient, or the provider IRS Publication 502. The tax topic summary says the deduction applies only to expenses not compensated by insurance or otherwise, which is a good reminder to separate out any covered portion before calculating the deduction IRS Topic 502.

What should you keep track of for tax time?

Keep records of what you paid, when you paid it, and what part, if any, was reimbursed. Because only the amount above 7.5% of AGI is deductible, you need both your qualifying medical total and your AGI to know whether there is anything to claim IRS Publication 502. It also helps to separate fertility-related bills that fit the IRS definition of medical care from costs that are more general or already covered by insurance IRS Publication 502.

What is the simplest way to think about fertility tax deductions?

Think of it in three steps. First, ask whether the expense fits the IRS definition of medical care or appears in Publication 502’s list of medical expenses, such as fertility enhancement IRS Publication 502. Second, remove any amount paid by insurance or another source IRS Publication 502. Third, compare the remaining eligible total with 7.5% of your AGI, because only the amount above that threshold can be deducted on Schedule A if you itemize IRS Publication 502.

What if you are not sure an expense fits?

The IRS says Publication 502 covers many common medical expenses but not every possible one, and if you cannot find the expense you are looking for, you should use the general definition of medical expenses IRS Publication 502. That means the safest question is whether the cost was primarily for diagnosis, treatment, or another medical purpose, rather than whether it was simply part of a fertility journey IRS Publication 502.