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Someone asked the question if she could deduct on her taxes the cost of diapers used by her child with a disability. Great question! Having a child with disabilties puts great strain on your budget, and every bit of savings helps. There is no definitive answer, but an analysis of IRS
documents implies that the cost can be deducted if your child is
disabled and above the age when a child without a disability would no
longer use them. Ordinarily, diapers are not deductible as a medical deduction to your taxes, and the primary government documents specifically exclude them. The easiest place to look for information of the
deductibility of
medical expenses is IRS Publication 502. Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include dental expenses. Medical care expenses must
be primarily to alleviate or prevent a
physical or mental defect or illness. They do not include expenses that
are merely beneficial to general health, such as vitamins or a vacation.
It also describes those that are not deductible: You cannot include in medical expenses the cost of an item ordinarily used for personal, living, or family purposes unless it is used primarily to prevent or alleviate a physical or mental defect or illness. For example, the cost of a toothbrush and toothpaste is a nondeductible personal expense. Where
an item purchased in a special form primarily to alleviate a physical
defect is one that in normal form is ordinarily used for personal,
living, or family purposes, the excess of the cost of the special form
over the cost of the normal form is a medical expense
In particular IRS Pub 502 states: You cannot include in
medical expenses the amount you pay for diapers or diaper services, unless they are
needed to relieve the effects of a particular disease.
This statement seems to apply the general rules
above. Also, the statement is based on IRS
Revenue Ruling 55-261,
which states: "16. Maternity clothing,
antiseptic
diaper service, wigs, toothpaste
.-Amounts expended for the preservation of general health or for the
alleviation of physical or mental discomfort which is unrelated to some
particular disease or defect are not expenses for medical care as
defined in section 23(x) of the Code. [Step-Law note: Now sec. 213.]
Expenditures for maternity
clothing, antiseptic diaper service, wigs, and toothpaste, are held to
be personal expenses, the deduction of which is prohibited by section
24(a)(1) of the Code. O. G. Russell v. Commissioner , Tax Court
Memorandum Opinion, entered November 6, 1953."
So far, IRS Pub 502 accurately states the law for most people. Our sons and daughters, however, are not like most people. Diapers are ordinary personal costs of most babies, and for them not deductible. The key here is the "unless." The real question here is whether diapers count for the exception: "they are needed to relieve the effects of a particular disease." The answer is that they can be, but there is no controlling precedent.In 1981, the Tax Commissioner issued a Private Letter Ruling discussing Code Section 213. As opposed to court rulings which have precedential value, a letter ruling is directed only to the taxpayer who requested it and is not precedential. However, the letter provides guidance on how the IRS has considered the issue in the past.In PLR 8137085: the commissioner noted the following facts:
"Because
disposable diapers are used to alleviate the effects of a particular
disease, ...
we hold that the cost of disposable diapers is a cost of the medical
care of your daughter and is deductible under section 213 of the Code."
If your child has the above effects, the IRS should rule similarly. It should apply to any neurologic disorder which results in incontinence, not just the syndrome listed above. They help alleviate the effects of a particular disease. New: in 2009, the IRS issued another letter which stated that items which have no other purpose other than to treat the effects of a disease, such as for incontinence, would likely be deductible. See the OTC letter. However, no medical expenses are deductible unless you meet two other requirements:
Dietary Foods - Deductible?
A 09/28/2007 IRS information letter ( http://www.irs.ustreas.gov/pub/irs-wd/07-0037.pdf)
explains that diet foods, meal replacements, and dietary supplements to
help people reduce their weight do not qualify as medical care expenses
under Code Section 213(d). The IRS letter notes that expenses must be
for the diagnosis, cure, mitigation, treatment, or prevention of
disease, or for the purpose of affecting a structure or function of the
body in order to qualify as Code Section 213(d) medical care expenses.
In contrast, diet foods, meal replacements, an dietary supplements are
substitutes for the food that individuals normally consume to satisfy
their nutritional requirements and are nondeductible personal expenses.
The letter references Revenue Ruling 2002-19, holding that even though
obesity was considered to be a disease, reduced-calorie diet
foods were not medical care expenses under IRC Section 213(d), even
when purchased by individuals diagnosed with obesity.. |