Deducting the Cost of
Diapers
for your Child with a
Disability
Stepnowski
Law Library
The Law Office of Edward L. Stepnowski
Please do not use
this article as definitive advice, as your situation
may vary. Consult your attorney or tax professional.
Nothing on this page creates an attorney-client relationship.
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discussed below:
diapers
special foods
service dogs
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.
Links to Pub 502 and the tax code and regulations are on the tax reference page.
Publication 502 gives the general rules:
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:
- the taxpayer's daughter suffered from Aicardi
syndrome, which
resulted in brain damage,
- she was completely incontinent,
- she was "long past the age when diapers would be a
normal living
expense" (she was 4 years old).
- "her physician stated that should require diapers
- on a constant basis because of her
neurological disease,
- and because of her size and skin breakdown
potential, absorbent
paper product diapers should be used."
The IRS concluded:
"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:
- Your itemized deductions exceed the "standard
deduction"
(easy to
do if you have a mortgage and pay real estate and State income
taxes.) The standard deduction is about $9,700 for married
couples,
less for singles.
- Your family's total, unreimbursed medical expenses
exceed 7.5% of
your adjusted gross income (usually hard, but can be met if your child
has medical treatments insurance will not pay, such as ABA or other
treatments). This threshold is described in the tax reference
page.:MedicalDed.html
Remember
that the law is always changing and you should consult a tax
professional.
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..
In 2009, the IRS repeated this advice in the OTC
letter.
However, previous IRS guidance states that, in special cases, depending
upon the particular facts
presented, if the prescribed food or beverage is taken solely for the
alleviation or treatment of an illness, is in no way a part of the
nutritional needs of the patient, and a statement as to the particular
facts and to the food or beverage prescribed is submitted by a
physician, the cost of such food or beverage may be deducted as a
medical expense. Where the special food or beverage is taken as a
substitute for food or beverage normally consumed by a person and
satisfies his nutritional requirements, the expense incurred is a
personal expense; but where it is
prescribed by a physician for medicinal purposes and is
in addition to the normal diet of the patient, the cost may qualify as
a medicinal expense, based on IRS
Revenue Ruling 55-261,
New: Infant formula, not
deductible.
In a private letter ruling, PLR-102915-09, the IRS
concluded that infant formula for the healthy baby of a woman who could
not breastfeed due to a double mastectomy was not a medical care
expense under Code Section 213(d). Because the baby in this ruling was
healthy and the infant formula satisfied the baby's normal nutritional
needs, the IRS concluded that the formula should be viewed as food that
the baby would normally consume and not as a medical care expense.
(July 1, 2009)
http://www.irs.gov/pub/irs-wd/0941003.pdf
New: IRS says breast pumps tax deductible expense
The cost of breast pumps will now be considered
tax-deductible medical expenses under a ruling issued by the Internal
Revenue Service in February.
The ruling, long sought by advocates, means that women
will be able to use money set aside in pretax spending accounts to buy
the pumps and related equipment, which can cost several hundred
dollars. For women without flexible spending accounts, the cost of
pumps will be tax deductible if their total medical costs exceed 7.5
percent of adjusted gross income.
Previously, the IRS considered breast pumps to be
feeding equipment, not medical devices. However, the American Academy
of Pediatrics argued that breastfeeding has many medical benefits for
both mother and baby. Advocates hope that making breast pumps more
affordable will enable more women to breastfeed longer.
Crohn's disease:
ordinary substitute food is not deductible. The court was not
convinced that his diet, although followed for medical reasons,
differed from the diet of an ordinarily health conscious individual.
The court rejected taxpayers’ claims for deductions for special foods
which were found to be merely substitutes for foods normally consumed
by an individual. Massa v. Commissioner, T.C. Memo 1999-63, aff’d
without published opinion, 208 F.3d 226 (10th Cir. 2000).
Lorenzo's Oil, probably. Gluten-free, probably not.
New: Service
Dogs Tax Deduction extends to those with mental disabilities too.
Service dogs are invaluable aids to many people with disabilities, but
is the cost of the dog deductible?
IRS Publication 502 gives the answer that service dog expenses are tax
deductible:
"You can include in medical expenses the
costs of buying, training, and maintaining a guide dog or other service
animal to assist a visually-impaired or hearing-impaired person, or a
person with other physical
disabilities."
Tax law does require that the expense must be for a mitigation related
to the diagnosed medical
condition and not merely the general health of an individual.
If you are visually impaired and have dog to guide you,
then your expense is proven. However, the IRS explanation above
discusses “physical” disabilities, rather than mental disabilities.
This definition left those with mental
disabilities in a gray area. But if your doctor prescribes the
animal and links it to a
specific disabling mental condition, the IRS would probably accept
it. The general rule for deducting a medical expense is "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."
Last year, the IRS removed the doubt about service dogs
for those with mental disabilities when the IRS sent a letter to
Congress.
A taxpayer who claims that
an expense of a peculiarly personal nature is primarily for
medical care must establish that fact. The courts have looked toward
objective factors
to determine whether an otherwise personal expense is for medical care:
the taxpayer’s
motive or purpose for making the expenditure, whether a physician has
diagnosed a
medical condition and recommended the item as treatment or mitigation,
linkage
between the treatment and the illness, treatment effectiveness, and
proximity in time to
the onset or recurrence of a disease. Havey v. Commissioner, 12 T.C.
409 (1949). The
taxpayer also must establish that the expense would not have been paid
“but for” the
disease or illness. A personal expense is not deductible as medical
care if the taxpayer
would have paid the expense even in the absence of a medical condition.
Commissioner v. Jacobs, 62 T.C. 813 (1974).
The costs of buying,
training, and maintaining a service animal to assist an individual
with mental disabilities may qualify as
medical care if the taxpayer can establish that the
taxpayer is using the
service animal primarily for medical care to alleviate a mental
defect or illness and
that the taxpayer would not have paid the expenses but for the
disease or illness.
(Letter to Rep. Tanner, Index Number: 213.00-00, 06/25/2010.)
Following the rules listed in this letter should enable
you to prove the deduction.
Another possibility is that if you have a service dog to
help with a mental disability, you may be able to claim the animal
under “impairment-related work expenses.” The work
deduction is less limited than the medical deduction if it
qualifies, but for you to be considered disabled so as to claim
an impairment-related work expense, you must have a physical or
mental disability that functionally limits your being employed, or
a physical or mental impairment that substantially
limits one or more of your major life activities such as performing
manual tasks, walking, speaking, breathing, learning, or working.
Note that the new ADA regulations which are effective this March 2011
define service dog:
Any dog
that is individually trained to do work or perform tasks for the
benefit of an individual with a disability, including a physical,
sensory, psychiatric, intellectual, or other mental disability. Other
species of animals, whether wild or domestic, trained or untrained, are
not service animals for the purposes of this definition. The work or
tasks performed by a service animal must be directly related to the
handler´s disability. Examples of work or tasks include, but are
not limited to, assisting individuals who are blind or have low vision
with navigation and other tasks, alerting individuals who are deaf or
hard of hearing to the presence of people or sounds, providing
non-violent protection or rescue work, pulling a wheelchair, assisting
an individual during a seizure, alerting individuals to the presence of
allergens, retrieving items such as medicine or the telephone,
providing physical support and assistance with balance and stability to
individuals with mobility disabilities, and helping persons with
psychiatric and neurological disabilities by preventing or interrupting
impulsive or destructive behaviors. The crime deterrent effects of an
animal´s presence and the provision of emotional support,
well-being, comfort, or companionship do not constitute work or tasks
for the purposes of this definition.
Dogs may also qualify under IDEA, the Individuals with Disabilities
Education Act.
IRS Circular 230 Disclosure
To ensure compliance with requirements imposed by the IRS, we inform
you that any U.S. federal tax advice contained in this communication
(including any attachments) is not intended or written to be used, and
cannot be used, for the purpose of (i) avoiding penalties under the
Internal Revenue Code or (ii) promoting, marketing or recommending to
another party any transaction or matter addressed herein.
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