Table of Contents
- What Are Medical Expenses?
- What Expenses Can You Include This Year?
- How Much of the Expenses Can You Deduct?
- Whose Medical Expenses Can You Include?
- What Medical Expenses Are Includible?
- Abortion
- Acupuncture
- Alcoholism
- Ambulance
- Annual Physical Examination
- Artificial Limb
- Artificial Teeth
- Autoette
- Bandages
- Body Scan
- Breast Reconstruction Surgery
- Birth Control Pills
- Braille Books and Magazines
- Capital Expenses
- Car
- Chiropractor
- Christian Science Practitioner
- Contact Lenses
- Crutches
- Dental Treatment
- Diagnostic Devices
- Disabled Dependent Care Expenses
- Drug Addiction
- Drugs
- Eyeglasses
- Eye Surgery
- Fertility Enhancement
- Founder's Fee
- Guide Dog or Other Service Animal
- Health Institute
- Health Maintenance Organization (HMO)
- Hearing Aids
- Home Care
- Home Improvements
- Hospital Services
- Insurance Premiums
- Intellectually and Developmentally Disabled, Special Home for
- Laboratory Fees
- Lead-Based Paint Removal
- Learning Disability
- Legal Fees
- Lifetime Care—Advance Payments
- Lodging
- Long-Term Care
- Meals
- Medical Conferences
- Medical Information Plan
- Medical Services
- Medicines
- Nursing Home
- Nursing Services
- Operations
- Optometrist
- Organ Donors
- Osteopath
- Oxygen
- Physical Examination
- Pregnancy Test Kit
- Prosthesis
- Psychiatric Care
- Psychoanalysis
- Psychologist
- Special Education
- Sterilization
- Stop-Smoking Programs
- Surgery
- Telephone
- Television
- Therapy
- Transplants
- Transportation
- Trips
- Tuition
- Vasectomy
- Vision Correction Surgery
- Weight-Loss Program
- Wheelchair
- Wig
- X-ray
- What Expenses Are Not Includible?
- Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby
- Controlled Substances
- Cosmetic Surgery
- Dancing Lessons
- Diaper Service
- Electrolysis or Hair Removal
- Flexible Spending Account
- Funeral Expenses
- Future Medical Care
- Hair Transplant
- Health Club Dues
- Health Coverage Tax Credit
- Health Savings Accounts
- Household Help
- Illegal Operations and Treatments
- Insurance Premiums
- Maternity Clothes
- Medical Savings Account (MSA)
- Medicines and Drugs From Other Countries
- Nonprescription Drugs and Medicines
- Nutritional Supplements
- Personal Use Items
- Swimming Lessons
- Teeth Whitening
- Veterinary Fees
- Weight-Loss Program
- How Do You Treat Reimbursements?
- How Do You Figure and Report the Deduction on Your Tax Return?
- Sale of Medical Equipment or Property
- Damages for Personal Injuries
- Impairment-Related Work Expenses
- Health Insurance Costs for Self-Employed Persons
- Health Coverage Tax Credit
- How To Get Tax Help
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.
Medical expenses include the premiums you pay for insurance that covers the expenses of medical care, and the amounts you pay for transportation to get medical care. Medical expenses also include amounts paid for qualified long-term care services and limited amounts paid for any qualified long-term care insurance contract.
You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. (But see Decedent under Whose Medical Expenses Can You Include, later, for an exception.) If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. If you use a “pay-by-phone” or “online” account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged.
If you did not claim a medical or dental expense that would have been deductible in an earlier year, you can file Form 1040X, Amended U.S. Individual Income Tax Return, for the year in which you overlooked the expense. Do not claim the expense on this year's return. Generally, an amended return must be filed within 3 years from the date the original return was filed or within 2 years from the time the tax was paid, whichever is later.
You cannot include medical expenses that were paid by insurance companies or other sources. This is true whether the payments were made directly to you, to the patient, or to the provider of the medical services.
You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income (Form 1040, line 38).
In this publication, the term “7.5% limit” is used to refer to 7.5% of your adjusted gross income. The phrase “subject to the 7.5% limit” is also used. This phrase means that you must subtract 7.5% (.075) of your adjusted gross income from your medical expenses to figure your medical expense deduction.
You can generally include medical expenses you pay for yourself, as well as those you pay for someone who was your spouse or your dependent either when the services were provided or when you paid for them. There are different rules for decedents and for individuals who are the subject of multiple support agreements. See Support claimed under a multiple support agreement, later under Qualifying Relative.
You can include medical expenses you paid for your spouse. To include these expenses, you must have been married either at the time your spouse received the medical services or at the time you paid the medical expenses.
Example 1.
Mary received medical treatment before she married Bill. Bill paid for the treatment after they married. Bill can include these expenses in figuring his medical expense deduction even if Bill and Mary file separate returns.
If Mary had paid the expenses, Bill could not include Mary's expenses in his separate return. Mary would include the amounts she paid during the year in her separate return. If they filed a joint return, the medical expenses both paid during the year would be used to figure their medical expense deduction.
Example 2.
This year, John paid medical expenses for his wife Louise, who died last year. John married Belle this year and they file a joint return. Because John was married to Louise when she received the medical services, he can include those expenses in figuring his medical deduction for this year.
You can include medical expenses you paid for your dependent. For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses. A person generally qualifies as your dependent for purposes of the medical expense deduction if both of the following requirements are met.
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The person was a qualifying child (defined later) or a qualifying relative (defined later), and
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The person was a U.S. citizen or national or a resident of the United States, Canada, or Mexico. If your qualifying child was adopted, see Exception for adopted child, next.
A qualifying child is a child who:
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Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew),
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At the end of 2008 was:
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Under age 19,
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Under age 24 and a full-time student, or
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Permanently and totally disabled,
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Lived with you for more than half of 2008, and
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Did not provide over half of his or her own support for 2008.
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The child is in the custody of one or both parents for more than half the year,
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The child receives over half of his or her support during the year from his or her parents, and
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The child's parents:
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Are divorced or legally separated under a decree of divorce or separate maintenance,
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Are separated under a written separation agreement, or
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Live apart at all times during the last 6 months of the year.
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A qualifying relative is a person:
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Who is your:
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Son, daughter, stepchild, or foster child, or a descendant of any of them (for example, your grandchild),
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Brother or sister, or a son or daughter of either of them,
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Father or mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle),
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Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or
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Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law,
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Who was not a qualifying child (see Qualifying child above) of any taxpayer for 2008, and
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For whom you provided over half of the support in 2008. But see Child of divorced or separated parents , earlier, Support claimed under a multiple support agreement, next, and Kidnapped child under Qualifying Relative in Publication 501, Exemptions, Standard Deduction, and Filing Information.
Example.
You and your three brothers each provide one-fourth of your mother's total support. Under a multiple support agreement, you treat your mother as your dependent. You paid all of her medical expenses. Your brothers repaid you for three-fourths of these expenses. In figuring your medical expense deduction, you can include only one-fourth of your mother's medical expenses. Your brothers cannot include any part of the expenses. However, if you and your brothers share the nonmedical support items and you separately pay all of your mother's medical expenses, you can include the unreimbursed amount you paid for her medical expenses in your medical expenses.
Medical expenses paid before death by the decedent are included in figuring any deduction for medical and dental expenses on the decedent's final income tax return. This includes expenses for the decedent's spouse and dependents as well as for the decedent.
The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. The expenses must be paid within the 1-year period beginning with the day after the date of death. If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return.
Qualified medical expenses paid before death by the decedent are not deductible if paid with a tax-free distribution from any Archer MSA or health savings account.Example.
John properly filed his 2007 income tax return. He died in 2008 with unpaid medical expenses of $1,500 from 2007 and $1,800 in 2008. His survivor or personal representative can file an amended return for 2007 claiming a deduction based on the $1,500 medical expenses. The $1,800 of medical expenses from 2008 can be included on the decedent's final return for 2008.
Following is a list of items that you can include in figuring your medical expense deduction. The items are listed in alphabetical order.
This list does not include all possible medical expenses. To determine if an expense not listed can be included in figuring your medical expense deduction, see What Are Medical Expenses , earlier.
You can include in medical expenses amounts you pay for an inpatient's treatment at a therapeutic center for alcohol addiction. This includes meals and lodging provided by the center during treatment.
You can also include in medical expenses amounts you pay for transportation to and from Alcoholics Anonymous meetings in your community if the attendance is pursuant to medical advice that membership in Alcoholics Anonymous is necessary for the treatment of a disease involving the excessive use of alcoholic liquors.
See Physical Examination, later.
See Wheelchair , later.
You can include in medical expenses the cost of medical supplies such as bandages used to cover torn skin.
You can include in medical expenses the amounts you pay for breast reconstruction surgery following a mastectomy for cancer.
You can include in medical expenses the amount you pay for birth control pills prescribed by a doctor.
You can include in medical expenses the part of the cost of Braille books and magazines for use by a visually impaired person that is more than the cost of regular printed editions.
You can include in medical expenses amounts you pay for special equipment installed in a home, or for improvements, if their main purpose is medical care for you, your spouse, or your dependent. The cost of permanent improvements that increase the value of your property may be partly included as a medical expense. The cost of the improvement is reduced by the increase in the value of your property. The difference is a medical expense. If the value of your property is not increased by the improvement, the entire cost is included as a medical expense.
Certain improvements made to accommodate a home to your disabled condition, or that of your spouse or your dependents who live with you, do not usually increase the value of the home and the cost can be included in full as medical expenses. These improvements include, but are not limited to, the following items.
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Constructing entrance or exit ramps for your home.
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Widening doorways at entrances or exits to your home.
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Widening or otherwise modifying hallways and interior doorways.
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Installing railings, support bars, or other modifications to bathrooms.
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Lowering or modifying kitchen cabinets and equipment.
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Moving or modifying electrical outlets and fixtures.
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Installing porch lifts and other forms of lifts (but elevators generally add value to the house).
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Modifying fire alarms, smoke detectors, and other warning systems.
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Modifying stairways.
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Adding handrails or grab bars anywhere (whether or not in bathrooms).
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Modifying hardware on doors.
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Modifying areas in front of entrance and exit doorways.
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Grading the ground to provide access to the residence.
Only reasonable costs to accommodate a home to a disabled condition are considered medical care. Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses.
Worksheet A. Capital Expense Worksheet
Instructions: Use this worksheet to figure the amount, if any, of your medical expenses due to a home improvement. | |||||
1. | Enter the amount you paid for the home improvement | 1. | |||
2. | Enter the value of your home immediately after the improvement | 2. | |||
3. | Enter the value of your home immediately before the improvement | 3. | |||
4. | Subtract line 3 from line 2. This is the increase in the value of your home due to the improvement. | 4. | |||
• If line 4 is more than or equal to line 1, you have no medical expenses due to the home improvement; stop here. | |||||
• If line 4 is less than line 1, go to line 5. | |||||
5. | Subtract line 4 from line 1. These are your medical expenses due to the home improvement | 5. |
Example.
You have a heart ailment. On your doctor's advice, you install an elevator in your home so that you will not have to climb stairs. The elevator costs $8,000. An appraisal shows that the elevator increases the value of your home by $4,400. You figure your medical expense as shown in the filled-in example of Worksheet A.
Worksheet A. Capital Expense Worksheet—Illustrated
Instructions: Use this worksheet to figure the amount, if any, of your medical expenses due to a home improvement. | |||||
1. | Enter the amount you paid for the home improvement | 1. | 8,000 | ||
2. | Enter the value of your home immediately after the improvement | 2. | 124,400 | ||
3. | Enter the value of your home immediately before the improvement | 3. | 120,000 | ||
4. | Subtract line 3 from line 2. This is the increase in the value of your home due to the improvement. | 4. | 4,400 | ||
• If line 4 is more than or equal to line 1, you have no medical expenses due to the home improvement; stop here. | |||||
• If line 4 is less than line 1, go to line 5. | |||||
5. | Subtract line 4 from line 1. These are your medical expenses due to the home improvement | 5. | 3,600 |
Example.
If, in the previous example, the elevator increased the value of your home by $8,000, you would have no medical expense for the cost of the elevator. However, the cost of electricity to operate the elevator and any costs to maintain it are medical expenses as long as the medical reason for the elevator exists.
Example.
John has arthritis and a heart condition. He cannot climb stairs or get into a bathtub. On his doctor's advice, he installs a bathroom with a shower stall on the first floor of his two-story rented house. The landlord did not pay any of the cost of buying and installing the special plumbing and did not lower the rent. John can include in medical expenses the entire amount he paid.
You can include in medical expenses the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability.
You can include in medical expenses fees you pay to Christian Science practitioners for medical care.
You can include in medical expenses amounts you pay for contact lenses needed for medical reasons. You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner. See Eyeglasses and Eye Surgery , later.
You can include in medical expenses the amounts you pay for dental treatment. This includes fees paid to dentists for X-rays, fillings, braces, extractions, dentures, etc. But see Teeth Whitening under What Expenses Are Not Includible, later.
You can include in medical expenses the cost of devices used in diagnosing and treating illness and disease.
Some disabled dependent care expenses may qualify as either:
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Medical expenses, or
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Work-related expenses for purposes of taking a credit for dependent care.
You can choose to apply them either way as long as you do not use the same expenses to claim both a credit and a medical expense deduction.
You can include in medical expenses amounts you pay for an inpatient's treatment at a therapeutic center for drug addiction. This includes meals and lodging at the center during treatment.
See Medicines , later.
You can include in medical expenses amounts you pay for eyeglasses and contact lenses needed for medical reasons. You can also include fees paid for eye examinations.
You can include in medical expenses the amount you pay for eye surgery to treat defective vision, such as laser eye surgery or radial keratotomy.
You can include in medical expenses the cost of the following procedures to overcome an inability to have children.
See Lifetime Care—Advance Payments , later.
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.
You can include in medical expenses fees you pay for treatment at a health institute only if the treatment is prescribed by a physician and the physician issues a statement that the treatment is necessary to alleviate a physical or mental defect or illness of the individual receiving the treatment.
You can include in medical expenses amounts you pay to entitle you, your spouse, or a dependent to receive medical care from a health maintenance organization. These amounts are treated as medical insurance premiums. See Insurance Premiums , later.
You can include in medical expenses the cost of a hearing aid and the batteries you buy to operate it.
See Nursing Services , later.
See Capital Expenses, earlier.
You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. This includes amounts paid for meals and lodging. Also see Lodging , later.
You can include in medical expenses insurance premiums you pay for policies that cover medical care. Medical care policies can provide payment for treatment that includes:
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Hospitalization, surgical services, X-rays,
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Prescription drugs and insulin,
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Dental care,
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Replacement of lost or damaged contact lenses, and
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Long-term care (subject to additional limitations). See Qualified Long-Term Care Insurance Contracts under Long-Term Care , later.
If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. The cost of the medical part must be separately stated in the insurance contract or given to you in a separate statement.
Note.
When figuring the amount of insurance premiums you can include in medical expenses on Schedule A, do not include any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments.
Do not include in your medical and dental expenses any insurance premiums paid by an employer-sponsored health insurance plan unless the premiums are included in box 1 of your Form W-2, Wage and Tax Statement. Also, do not include any other medical and dental expenses paid by the plan unless the amount paid is included in box 1 of your Form W-2.
Example.
You are a federal employee participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. Your share of the FEHB premium is paid by making a pre-tax reduction in your salary. Because you are an employee whose insurance premiums are paid with money that is never included in your gross income, you cannot deduct the premiums paid with that money.
If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare A. The payroll tax paid for Medicare A is not a medical expense. If you are not covered under social security (or were not a government employee who paid Medicare tax), you can voluntarily enroll in Medicare A. In this situation you can include the premiums you paid for Medicare A as a medical expense.
Medicare B is a supplemental medical insurance. Premiums you pay for Medicare B are a medical expense. If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid. If you were over age 65 or disabled when you first enrolled, check the information you received from the Social Security Administration to find out your premium.
Medicare D is a voluntary prescription drug insurance program for persons with Medicare A or B. You can include as a medical expense premiums you pay for Medicare D.
Premiums you pay before you are age 65 for insurance for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are:
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Payable in equal yearly installments or more often, and
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Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years).
You must include in gross income cash payments you receive at the time of retirement for unused sick leave. You also must include in gross income the value of unused sick leave that, at your option, your employer applies to the cost of your continuing participation in your employer's health plan after you retire. You can include this cost of continuing participation in the health plan as a medical expense.
If you participate in a health plan where your employer automatically applies the value of unused sick leave to the cost of your continuing participation in the health plan (and you do not have the option to receive cash), do not include the value of the unused sick leave in gross income. You cannot include this cost of continuing participation in that health plan as a medical expense.
You cannot include premiums you pay for:
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Life insurance policies,
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Policies providing payment for loss of earnings,
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Policies for loss of life, limb, sight, etc.,
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Policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness or injury,
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The part of your car insurance that provides medical insurance coverage for all persons injured in or by your car because the part of the premium providing insurance for you, your spouse, and your dependents is not stated separately from the part of the premium providing insurance for medical care for others, or
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Health or long-term care insurance if you elected to pay these premiums with tax-free distributions from a retirement plan made directly to the insurance provider and these distributions would otherwise have been included in income.
Taxes imposed by any governmental unit, such as Medicare taxes, are not insurance premiums.
You can include in medical expenses the cost of keeping a person who is intellectually and developmentally disabled (mentally retarded) in a special home, not the home of a relative, on the recommendation of a psychiatrist to help the person adjust from life in a mental hospital to community living.
You can include in medical expenses the amounts you pay for laboratory fees that are part of medical care.
You can include in medical expenses the cost of removing lead-based paints from surfaces in your home to prevent a child who has or had lead poisoning from eating the paint. These surfaces must be in poor repair (peeling or cracking) or within the child's reach. The cost of repainting the scraped area is not a medical expense.
If, instead of removing the paint, you cover the area with wallboard or paneling, treat these items as capital expenses. See Capital Expenses , earlier. Do not include the cost of painting the wallboard as a medical expense.
See Special Education , later.
You can include in medical expenses legal fees you paid that are necessary to authorize treatment for mental illness. However, you cannot include in medical expenses fees for the management of a guardianship estate, fees for conducting the affairs of the person being treated, or other fees that are not necessary for medical care.
You can include in medical expenses a part of a life-care fee or “founder's fee” you pay either monthly or as a lump sum under an agreement with a retirement home. The part of the payment you include is the amount properly allocable to medical care. The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. You can use a statement from the retirement home to prove the amount properly allocable to medical care. The statement must be based either on the home's prior experience or on information from a comparable home.
You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to receive medical care. See Nursing Home , later.
You may be able to include in medical expenses the cost of lodging not provided in a hospital or similar institution. You can include the cost of such lodging while away from home if all of the following requirements are met.
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The lodging is primarily for and essential to medical care.
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The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital.
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The lodging is not lavish or extravagant under the circumstances.
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There is no significant element of personal pleasure, recreation, or vacation in the travel away from home.
The amount you include in medical expenses for lodging cannot be more than $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals are not included.
Do not include the cost of lodging while away from home for medical treatment if that treatment is not received from a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital or if that lodging is not primarily for or essential to the medical care received.
You can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts.
Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are:
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Required by a chronically ill individual, and
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Provided pursuant to a plan of care prescribed by a licensed health care practitioner.
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He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence.
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He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.
A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. The contract must:
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Be guaranteed renewable,
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Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed,
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Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and
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Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses.
The amount of qualified long-term care premiums you can include is limited. You can include the following as medical expenses on Schedule A (Form 1040).
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Qualified long-term care premiums up to the amounts shown below.
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Age 40 or under – $310.
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Age 41 to 50 – $580.
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Age 51 to 60 – $1,150.
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Age 61 to 70 – $3,080.
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Age 71 or over – $3,850.
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Unreimbursed expenses for qualified long-term care services.
Note. The limit on premiums is for each person.
Also, you cannot include premiums for long-term care insurance if you elected to pay these premiums with tax-free distributions from a qualified retirement plan made directly to the insurance provider and these distributions would otherwise have been included in income.
You can include in medical expenses the cost of meals at a hospital or similar institution if a principal reason for being there is to get medical care.
You cannot include in medical expenses the cost of meals that are not part of inpatient care.
You can include in medical expenses amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent. The costs of the medical conference must be primarily for and necessary to the medical care of you, your spouse, or your dependent. The majority of the time spent at the conference must be spent attending sessions on medical information.
The cost of meals and lodging while attending the conference is not deductible as a medical expense.You can include in medical expenses amounts paid to a plan that keeps medical information in a computer data bank and retrieves and furnishes the information upon request to an attending physician.
You can include in medical expenses amounts you pay for legal medical services provided by:
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Physicians,
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Surgeons,
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Specialists, or
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Other medical practitioners.
You can include in medical expenses amounts you pay for prescribed medicines and drugs. A prescribed drug is one that requires a prescription by a doctor for its use by an individual. You can also include amounts you pay for insulin. Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed.
You can include in medical expenses the cost of medical care in a nursing home, home for the aged, or similar institution, for yourself, your spouse, or your dependents. This includes the cost of meals and lodging in the home if a principal reason for being there is to get medical care.
Do not include the cost of meals and lodging if the reason for being in the home is personal. You can, however, include in medical expenses the part of the cost that is for medical or nursing care.
You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.
Generally, only the amount spent for nursing services is a medical expense. If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. See Maintenance and personal care services under Long-Term Care , earlier. Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. See Publication 503, Child and Dependent Care Expenses.
You can also include in medical expenses part of the amount you pay for that attendant's meals. Divide the food expense among the household members to find the cost of the attendant's food. Then divide that cost in the same manner as in the preceding paragraph. If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant.
You can include in medical expenses amounts you pay for legal operations that are not for unnecessary cosmetic surgery. See Cosmetic Surgery under What Expenses Are Not Includible, later.
See Eyeglasses , earlier.
See Transplants, later.
You can include in medical expenses amounts you pay for oxygen and oxygen equipment to relieve breathing problems caused by a medical condition.
You can include in medical expenses the amount you pay for an annual physical examination and diagnostic tests by a physician. You do not have to be ill at the time of the examination.
You can include in medical expenses the amount you pay to purchase a pregnancy test kit to determine if you are pregnant.
See Artificial Limb , earlier.
You can include in medical expenses amounts you pay for psychiatric care. This includes the cost of supporting a mentally ill dependent at a specially equipped medical center where the dependent receives medical care. See Psychoanalysis , next, and Transportation , later.
You can include in medical expenses payments for psychoanalysis. However, you cannot include payments for psychoanalysis that is part of required training to be a psychoanalyst.
You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders.
You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. A doctor must recommend that the child attend the school. Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Special education includes:
-
Teaching Braille to a visually impaired person,
-
Teaching lip reading to a hearing-impaired person, or
-
Giving remedial language training to correct a condition caused by a birth defect.
You cannot include in medical expenses the cost of sending a problem child to a school where the course of study and the disciplinary methods have a beneficial effect on the child's attitude if the availability of medical care in the school is not a principal reason for sending the student there.
You can include in medical expenses the cost of a legal sterilization (a legally performed operation to make a person unable to have children).
You can include in medical expenses amounts you pay for a program to stop smoking. However, you cannot include in medical expenses amounts you pay for drugs that do not require a prescription, such as nicotine gum or patches, that are designed to help stop smoking.
See Operations , earlier.
You can include in medical expenses the cost of special telephone equipment that lets a hearing-impaired person communicate over a regular telephone. This includes teletypewriter (TTY) and telecommunications device for the deaf (TDD) equipment. You can also include the cost of repairing the equipment.
You can include in medical expenses the cost of equipment that displays the audio part of television programs as subtitles for hearing-impaired persons. This may be the cost of an adapter that attaches to a regular set. It also may be the part of the cost of a specially equipped television that exceeds the cost of the same model regular television set.
You can include any expenses you pay for medical care you receive because you are a donor or a possible donor of a kidney or other organ. This includes transportation.
You can include any expenses you pay for the medical care of a donor in connection with the donating of an organ. This includes transportation.
You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care.
-
Bus, taxi, train, or plane fares or ambulance service,
-
Transportation expenses of a parent who must go with a child who needs medical care,
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Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and
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Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment.
Example.
Bill Jones drove 2,800 miles for medical reasons during the year. Bill drove 1,000 miles from January 1 to June 30, and 1,800 miles from July 1 to December 31. He spent $400 for gas, $30 for oil, and $100 for tolls and parking. He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction.
He figures the actual expenses first. He adds the $400 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $530.
He then figures the standard mileage amount. He multiplies the 1,000 miles by 19 cents a mile and 1,800 miles by 27 cents for a total of $676. He then adds the $100 tolls and parking for a total of $776.
Bill includes the $776 of car expenses with his other medical expenses for the year because the $776 is more than the $530 he figured using actual expenses.
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Going to and from work, even if your condition requires an unusual means of transportation.
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Travel for purely personal reasons to another city for an operation or other medical care.
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Travel that is merely for the general improvement of one's health.
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The costs of operating a specially equipped car for other than medical reasons.
You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. You may be able to include up to $50 per night for lodging. See Lodging , earlier.
You cannot include in medical expenses a trip or vacation taken merely for a change in environment, improvement of morale, or general improvement of health, even if the trip is made on the advice of a doctor. However, see Medical Conferences , earlier.
Under special circumstances, you can include charges for tuition in medical expenses. See Special Education, earlier.
You can include charges for a health plan included in a lump-sum tuition fee if the charges are separately stated or can easily be obtained from the school.
See Eye Surgery, earlier.
You can include in medical expenses amounts you pay to lose weight if it is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). This includes fees you pay for membership in a weight reduction group as well as fees for attendance at periodic meetings. You cannot include membership dues in a gym, health club, or spa as medical expenses, but you can include separate fees charged there for weight loss activities.
You cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. You can include the cost of special food in medical expenses only if:
-
The food does not satisfy normal nutritional needs,
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The food alleviates or treats an illness, and
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The need for the food is substantiated by a physician.
The amount you can include in medical expenses is limited to the amount by which the cost of the special food exceeds the cost of a normal diet. See also Weight-Loss Program under What Expenses Are Not Includible, later.
You can include in medical expenses amounts you pay for an autoette or a wheelchair used mainly for the relief of sickness or disability, and not just to provide transportation to and from work. The cost of operating and maintaining the autoette or wheelchair is also a medical expense.
Following is a list of some items that you cannot include in figuring your medical expense deduction. The items are listed in alphabetical order.
You cannot include in medical expenses amounts you pay for the care of children, even if the expenses enable you, your spouse, or your dependent to get medical or dental treatment. Also, any expense allowed as a childcare credit cannot be treated as an expense paid for medical care.
You cannot include in medical expenses amounts you pay for controlled substances (such as marijuana, laetrile, etc.), in violation of federal law.
Generally, you cannot include in medical expenses the amount you pay for unnecessary cosmetic surgery. This includes any procedure that is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease. You generally cannot include in medical expenses the amount you pay for procedures such as face lifts, hair transplants, hair removal (electrolysis), and liposuction.
You can include in medical expenses the amount you pay for cosmetic surgery if it is necessary to improve a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.
You cannot include the cost of dancing lessons, swimming lessons, etc., even if they are recommended by a doctor, if they are only for the improvement of general health.
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.
See Cosmetic Surgery , earlier.
You cannot include in medical expenses amounts for which you are fully reimbursed by your flexible spending account if you contribute a part of your income on a pre-tax basis to pay for the qualified benefit.
Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care or long-term care of the type described at Lifetime Care—Advance Payments or Long-Term Care earlier under What Medical Expenses Are Includible.
See Cosmetic Surgery , earlier.
You cannot include in medical expenses health club dues or amounts paid to improve one's general health or to relieve physical or mental discomfort not related to a particular medical condition.
You cannot include in medical expenses the cost of membership in any club organized for business, pleasure, recreation, or other social purpose.
You cannot include in medical expenses amounts you pay for health insurance that you use in figuring your health coverage tax credit. For more information, see Health Coverage Tax Credit, later.
You cannot include in medical expenses any payment or distribution for medical expenses out of a health savings account. Contributions to health savings accounts are deducted separately. See Publication 969.
You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. This is a personal expense that is not deductible. However, you may be able to include certain expenses paid to a person providing nursing-type services. For more information, see Nursing Services, earlier under What Medical Expenses Are Includible . Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. For more information, see Long-Term Care, earlier under What Medical Expenses Are Includible.
You cannot include in medical expenses amounts you pay for illegal operations, treatments, or controlled substances whether rendered or prescribed by licensed or unlicensed practitioners.
See Insurance Premiums under What Medical Expenses Are Includible , earlier.
You cannot include in medical expenses amounts you contribute to an Archer MSA. You cannot include expenses you pay for with a tax-free distribution from your Archer MSA. You also cannot use other funds equal to the amount of the distribution and include the expenses. For more information on Archer MSAs, see Publication 969.
In general, you cannot include in your medical expenses the cost of a prescribed drug brought in (or ordered shipped) from another country. You can only include the cost of a drug that was imported legally. For example, you can include the cost of a prescribed drug the Food and Drug Administration announces can be legally imported by individuals.
You can include the cost of a prescribed drug you purchase and consume in another country if the drug is legal in both the other country and the United States.
Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed.
You cannot include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, these items are taken to maintain your ordinary good health, and are not for medical care.
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.
In order to accommodate an individual with a physical defect, you may have to purchase an item ordinarily used as a personal, living, or family item in a special form. You can include the excess of the cost of the item in a special form over the cost of the item in normal form as a medical expense. See Braille Books and Magazines under What Medical Expenses Are Includible , earlier).
See Dancing Lessons, earlier.
You cannot include in medical expenses amounts paid to whiten teeth. See Cosmetic Surgery , earlier.
You generally cannot include veterinary fees in your medical expenses, but see Guide Dog or Other Service Animal under What Medical Expenses Are Includible , earlier.
You cannot include in medical expenses the cost of a weight-loss program if the purpose of the weight loss is the improvement of appearance, general health, or sense of well-being. You cannot include amounts you pay to lose weight unless the weight loss is a treatment for a specific disease diagnosed by a physician (such as obesity, hypertension, or heart disease). If the weight-loss treatment is not for a specific disease diagnosed by a physician, you cannot include either the fees you pay for membership in a weight reduction group or fees for attendance at periodic meetings. Also, you cannot include membership dues in a gym, health club, or spa.
You cannot include the cost of diet food or beverages in medical expenses because the diet food and beverages substitute for what is normally consumed to satisfy nutritional needs. You cannot include the cost of special food in medical expenses unless all three of the following requirements are met.
-
The food does not satisfy normal nutritional needs.
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The food alleviates or treats an illness.
-
The need for the food is substantiated by a physician.
The amount you can include in medical expenses is limited to the amount by which the cost of the special food exceeds the cost of a normal diet.
You can include in medical expenses only those amounts paid during the tax year for which you received no insurance or other reimbursement.
You must reduce your total medical expenses for the year by all reimbursements for medical expenses that you receive from insurance or other sources during the year. This includes payments from Medicare.
Even if a policy provides reimbursement only for certain specific medical expenses, you must use amounts you receive from that policy to reduce your total medical expenses, including those it does not provide reimbursement for.
Example.
You have insurance policies that cover your hospital and doctors' bills but not your nursing bills. The insurance you receive for the hospital and doctors' bills is more than their charges. In figuring your medical deduction, you must reduce the total amount you spent for medical care by the total amount of insurance you received, even if the policies do not cover some of your medical expenses.
-
Permanent loss or loss of use of a member or function of the body (loss of limb, sight, hearing, etc.) or disfigurement to the extent the payment is based on the nature of the injury without regard to the amount of time lost from work, or
-
Loss of earnings.
If you are reimbursed more than your medical expenses, you may have to include the excess in income. You may want to use Figure 1 to help you decide if any of your reimbursement is taxable.
Worksheet B. Excess Reimbursement Includible in Income When You Have Only One Policy
Instructions: Use this worksheet to figure the amount of excess reimbursement you must include in income when both you and your employer contributed to your medical insurance and your employer's contributions are not included in your gross income. | |||
1. | Enter the amount contributed to your medical insurance for the year by your employer | 1. | |
2. | Enter the total annual cost of the policy | 2. | |
3. | Divide line 1 by line 2 | 3. | |
4. | Enter the amount of excess reimbursement | 4. | |
5. | Multiply line 3 by line 4. This is the amount of the excess reimburse- ment you must include as other income on Form 1040, line 21 |
5. |
Example.
You are covered by your employer's medical insurance policy. The annual premium is $2,000. Your employer pays $600 of that amount, which is not included in your gross income, and the balance of $1,400 is taken out of your wages. You receive $500 excess reimbursement for your medical expenses. The part of the excess reimbursement you receive under the policy that is from your employer's contributions is figured as follows.
Worksheet B. Excess Reimbursement Includible in Income When You Have Only One Policy—Illustrated
Instructions: Use this worksheet to figure the amount of excess reimbursement you must include in income when both you and your employer contributed to your medical insurance and your employer's contributions are not included in your gross income. | |||
1. | Enter the amount contributed to your medical insurance for the year by your employer | 1. | 600 |
2. | Enter the total annual cost of the policy | 2. | 2,000 |
3. | Divide line 1 by line 2 | 3. | .30 |
4. | Enter the amount of excess reimbursement | 4. | 500 |
5. | Multiply line 3 by line 4. This is the amount of the excess reimburse- ment you must include as other income on Form 1040, line 21 | 5. | 150 |
Worksheet C. Excess Reimbursement Includible in Income When You Have More Than One Policy
Instructions: Use this worksheet to figure the amount of excess reimbursement you must include as income on your tax return when a) you are reimbursed under two or more health insurance policies, b) at least one of which is paid for by both you and your employer, and c) your employer's contributions are not included in your gross income. If you and your employer did not share in the cost of at least one policy, do not use this worksheet. | |||||||
1. | Enter the reimbursement from your employer's policy | 1. | |||||
2. | Enter the reimbursement from your own policy | 2. | |||||
3. | Add lines 1 and 2 | 3. | |||||
4. | Divide line 1 by line 3. | 4. | |||||
5. | Enter the total medical expenses you paid during the year. If this amount is at least as much as the amount on line 3, stop here because there is no excess reimbursement. | 5. | |||||
6. | Multiply line 4 by line 5 | 6. | |||||
7. | Subtract line 6 from line 1 | 7. | |||||
8. | Enter employer's contribution to the annual cost of the employer's policy | 8. | |||||
9. | Enter total annual cost of the employer's policy | 9. | |||||
10. | Divide line 8 by line 9. This is the percentage of your total excess reimbursement you must report as other income | 10. | |||||
11. | Multiply line 7 by line 10. This is the amount of your total excess reimbursement you must report as other income on Form 1040, line 21 |
11. |
Example.
You are covered by your employer's health insurance policy. The annual premium is $1,200. Your employer pays $300 and the balance of $900 is deducted from your wages. You also paid the entire premium ($250) for a personal health insurance policy.
During the year, you paid medical expenses of $3,600. In the same year, you were reimbursed $2,400 under your employer's policy and $1,600 under your own personal policy. The amount you must report as other income is figured as follows.
Worksheet C. Excess Reimbursement Includible in Income When You Have More Than One Policy—Illustrated
Instructions: Use this worksheet to figure the amount of excess reimbursement you must include as income on your tax return when a) you are reimbursed under two or more health insurance policies, b) at least one of which is paid for by both you and your employer, and c) your employer's contributions are not included in your gross income. If you and your employer did not share in the cost of at least one policy, do not use this worksheet. | |||||||
1. | Enter the reimbursement from your employer's policy | 1. | 2,400 | ||||
2. | Enter the reimbursement from your own policy | 2. | 1,600 | ||||
3. | Add lines 1 and 2 | 3. | 4,000 | ||||
4. | Divide line 1 by line 3 | 4. | .60 | ||||
5. | Enter the total medical expenses you paid during the year. If this amount is at least as much as the amount on line 3, stop here because there is no excess reimbursement. | 5. | 3,600 | ||||
6. | Multiply line 4 by line 5 | 6. | 2,160 | ||||
7. | Subtract line 6 from line 1 | 7. | 240 | ||||
8. | Enter employer's contribution to the annual cost of the employer's policy | 8. | 300 | ||||
9. | Enter total annual cost of the employer's policy | 9. | 1,200 | ||||
10. | Divide line 8 by line 9. This is the percentage of your total excess reimbursement you must report as other income | 10. | .25 | ||||
11. | Multiply line 7 by line 10. This is the amount of your total excess reimbursement you must report as other income on Form 1040, line 21 | 11. | 60 |
If you are reimbursed in a later year for medical expenses you deducted in an earlier year, you generally must report the reimbursement as income up to the amount you previously deducted as medical expenses.
However, you do not report as income the amount of reimbursement you received up to the amount of your medical deductions that did not reduce your tax for the earlier year.
For more information about the recovery of an amount that you claimed as an itemized deduction in an earlier year, see Recoveries in Publication 525, Taxable and Nontaxable Income.
If you did not deduct a medical expense in the year you paid it because your medical expenses were not more than 7.5% of your adjusted gross income, or because you did not itemize deductions, do not include the reimbursement, up to the amount of the expense, in income. However, if the reimbursement is more than the expense, see What If Your Insurance Reimbursement Is More Than Your Medical Expenses , earlier.
Once you have determined which medical care expenses you can include, figure and report the deduction on your tax return.
You report your medical expense deduction on Schedule A, Form 1040. You cannot claim medical expenses on Form 1040A, U.S. Individual Income Tax Return, or Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents. An example of a filled-in medical and dental expense part of Schedule A is shown.
To figure your medical and dental expense deduction, complete lines 1 through 4 of Schedule A, Form 1040, as follows:
Example.
Bill and Helen Jones belong to a group medical plan and part of their insurance is paid by Bill's employer. They file a joint return, and their adjusted gross income is $33,004. The following list shows the net amounts, after insurance reimbursements, that Bill and Helen paid this year for medical expenses.
-
For themselves, Bill and Helen paid $375 for prescription medicines and drugs, $337 for hospital bills, $439 for doctor bills, $295 for hospitalization insurance, $380 for medical and surgical insurance, and $33 for transportation for medical treatment, which totals $1,859.
-
For Grace Taylor (Helen's dependent mother), they paid $300 for doctors, $300 for insulin, and $175 for eyeglasses, which totals $775.
-
For Betty Jones (Bill's dependent sister), they paid $450 for doctors and $350 for prescription medicines and drugs, which totals $800.
Bill and Helen add all their medical and dental expenses together ($1,859 + $775 + $800 = $3,434). They figure their deduction on the medical and dental expenses part of Schedule A, Form 1040, as shown.
-
The name and address of each person you paid, and
-
The amount and date of each payment.
You can keep a record like the following.
Record of medical expenses
Name of person you paid |
Address of person you paid |
Amount paid | Date paid | Transportation (mileage, taxi, etc.) | |
1. | |||||
2. | |||||
3. | |||||
4. | |||||
5. | |||||
6. | |||||
7. | |||||
8. | |||||
9. |
If you deduct the cost of medical equipment or property in one year and sell it in a later year, you may have a taxable gain. The taxable gain is the amount of the selling price that is more than the adjusted basis of the equipment or property.
The adjusted basis is the portion of the cost of the equipment or property that you could not deduct because of the 7.5% limit used to compute the medical deduction. Use Worksheet D, later, to figure the adjusted basis of the equipment or property.
Worksheet D. Adjusted Basis of Medical Equipment or Property Sold
Instructions: Use this worksheet if you deducted the cost of medical equipment or property in one year and sold the equipment or property in a later year. This worksheet will give you the adjusted basis of the equipment or property you sold. | |||||
1. | Enter the cost of the equipment or property. | 1. | |||
2. | Enter your total includible medical expenses for the year you included the cost in your medical expenses | 2. | |||
3. | Divide line 1 by line 2 | 3. | |||
4. | Enter 7.5% of your AGI for the year the cost was included in your medical expenses | 4. | |||
5. | Multiply line 3 by line 4. If your allowable itemized deductions for the year you purchased the equipment or property were not more than your AGI for that year, stop here. This is the adjusted basis of the equipment or property. If your allowable itemized deductions for the year you purchased the equipment or property were more than your AGI for that year, complete lines 6 through 11 | 5. | |||
6. | Subtract line 5 from line 1 | 6. | |||
7. | Enter your total allowable itemized deductions for the year the cost was included in your medical expenses | 7. | |||
8. | Divide line 6 by line 7 | 8. | |||
9. | Enter your AGI for the year the cost was included in your medical expenses | 9. | |||
10. | Subtract line 9 from line 7 | 10. | |||
11. | Multiply line 8 by line 10. | 11. | |||
12. | Add line 5 to line 11. If your allowable itemized deductions for the year you purchased the equipment or property were more than your AGI for that year, this is the adjusted basis of the equipment or property | 12. |
Next, use Worksheet E to figure the total gain or loss on the sale of the medical equipment or property.
Worksheet E. Gain or Loss On the Sale of Medical Equipment or Property
Instructions: Use the following worksheet to figure total gain or loss on the sale of medical equipment or property that you deducted in an earlier year. | |||
1. | Enter the amount that the medical equipment or property sold for | 1. | |
2. | Enter your selling expenses | 2. | |
3. | Subtract line 2 from line 1 | 3. | |
4. | Enter the adjusted basis of the equipment or property from line 5 or Worksheet D, line 12 | 4. | |
5. | Subtract line 4 from line 3. This is the total gain or loss from the sale of the medical equipment or property. | 5. |
If you have a loss, it is not deductible. If you have a gain, it is includible in your income. The part of the gain that is a recovery of an amount you previously deducted is taxable as ordinary income. Enter it on Form 1040, line 21. Any part of the gain that is more than the recovery of an amount you previously deducted is taxable as a capital gain. Enter it on Schedule D (Form 1040), Capital Gains and Losses.
For more information about the recovery of an amount that you claimed as an itemized deduction in an earlier year, see Recoveries in Publication 525.
Example.
You have a heart condition and difficulty breathing. Your doctor prescribed oxygen equipment to help you breathe. Last year, you bought the oxygen equipment for $3,000. You itemized deductions and included it in your medical expense deduction.
Last year you also paid $10,750 for deductible medical services and $6,400 for other itemized deductions. Your adjusted gross income (AGI) was $15,000.
Taking into account the 7.5% limit on medical expenses, your allowable itemized deductions totaled $19,025, figured as follows:
Oxygen equipment | 3,000 |
Medical services | 10,750 |
Total medical expenses | 13,750 |
7.5% of AGI (.075 × $15,000) | −1,125 |
Allowable medical expense deduction | 12,625 |
Other itemized deductions | 6,400 |
Allowable itemized deductions | 19,025 |
You figure your adjusted basis as shown on the filled-in Worksheet D.
Worksheet D. Adjusted Basis of Medical Equipment or Property Sold—Illustrated
Instructions: Use this worksheet if you deducted the cost of medical equipment or property in one year and sold the equipment or property in a later year. This worksheet will give you the adjusted basis of the equipment or property you sold. | ||||
1. | Enter the cost of the equipment or property. | 1. | 3,000 | |
2. | Enter your total includible medical expenses for the year you included the cost in your medical expenses | 2. | 13,750 | |
3. | Divide line 1 by line 2 | 3. | .218 | |
4. | Enter 7.5% of your AGI for the year the cost was included in your medical expenses | 4. | 1,125 | |
5. | Multiply line 3 by line 4. If your allowable itemized deductions for the year you purchased the equipment or property were not more than your AGI for that year, stop here. This is the adjusted basis of the equipment or property. If your allowable itemized deductions for the year you purchased the equipment or property were more than your AGI for that year, complete lines 6 through 11 | 5. | 245 | |
6. | Subtract line 5 from line 1 | 6. | 2,755 | |
7. | Enter your total allowable itemized deductions for the year the cost was included in your medical expenses | 7. | 19,025 | |
8. | Divide line 6 by line 7 | 8. | .145 | |
9. | Enter your AGI for the year the cost was included in your medical expenses | 9. | 15,000 | |
10. | Subtract line 9 from line 7 | 10. | 4,025 | |
11. | Multiply line 8 by line 10. | 11. | 584 | |
12. | Add line 5 to line 11. If your allowable itemized deductions for the year you purchased the equipment or property were more than your AGI for that year, this is the adjusted basis of the equipment or property. | 12. | 829 |
Worksheet E.Gain or Loss On the Sale of Medical Equipment or Property—Illustrated
Instructions: Use the following worksheet to figure gain or loss on the sale of medical equipment or property that you deducted in an earlier year. | |||
1. | Enter the amount that the medical equipment or property sold for | 1. | 2,025 |
2. | Enter your selling expenses | 2. | 25 |
3. | Subtract line 2 from line 1 | 3. | 2,000 |
4. | Enter the adjusted basis of the equipment or property from line 5 or Worksheet D, line 12 | 4. | 829 |
5. | Subtract line 4 from line 3. This is the total gain or loss from the sale of the medical equipment or property. | 5. | 1,171 |
If you receive an amount in settlement of a personal injury suit, part of that award may be for medical expenses that you deducted in an earlier year. If it is, you must include that part in your income in the year you receive it to the extent it reduced your taxable income in the earlier year. See What If You Receive Insurance Reimbursement in a Later Year , discussed earlier under How Do You Treat Reimbursements.
Example.
You sued this year for injuries you suffered in an accident last year. You sought $10,000 for your injuries and did not itemize your damages. Last year, you paid $500 for medical expenses for your injuries. You deducted those expenses on last year's tax return. This year you settled your lawsuit for $2,000. Your settlement did not itemize or allocate the damages. The $2,000 is first presumed to be for the medical expenses that you deducted. The $500 is includible in your income this year because you deducted the entire $500 as a medical expense deduction last year.
Example.
You were injured in an accident. You sued and sought a judgment of $50,000 for your injuries. You settled the suit for $45,000. The settlement provided that $10,000 of the $45,000 was for future medical expenses for your injuries. You cannot include the first $10,000 that you pay for medical expenses for those injuries.
If you are disabled, you can take a business deduction for expenses that are necessary for you to be able to work. If you take a business deduction for these impairment-related work expenses, they are not subject to the 7.5% limit that applies to medical expenses.
You are disabled if you have:
-
A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed, or
-
A physical or mental impairment (for example, a sight or hearing impairment) that substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, or working.
-
Necessary for you to do your work satisfactorily,
-
For goods and services not required or used, other than incidentally, in your personal activities, and
-
Not specifically covered under other income tax laws.
Example.
You are blind. You must use a reader to do your work. You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. The reader's services are only for your work. You can deduct your expenses for the reader as business expenses.
If you were self-employed and had a net profit for the year, you may be able to deduct, as an adjustment to income, amounts paid for medical and qualified long-term care insurance on behalf of yourself, your spouse, and your dependents.
For those purposes, you were self-employed if you were a general partner (or a limited partner receiving guaranteed payments) or you received wages from an S corporation in which you were more than a 2% shareholder.
The insurance plan must be established under your trade or business and the deduction cannot be more than your earned income from that trade or business.
You cannot deduct payments for medical insurance for any month in which you were eligible to participate in a health plan subsidized by your employer or your spouse's employer. You cannot deduct payments for a qualified long-term care insurance contract for any month in which you were eligible to participate in a long-term care insurance plan subsidized by your employer or your spouse's employer.
If you qualify to take the deduction, use the Self-Employed Health Insurance Deduction Worksheet in the Form 1040 instructions to figure the amount you can deduct. But if any of the following applies, do not use the worksheet.
-
You had more than one source of income subject to self-employment tax.
-
You file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion.
-
You are using amounts paid for qualified long-term care insurance to figure the deduction.
If you cannot use the worksheet in the Form 1040 instructions, use the worksheet in Publication 535, Business Expenses, to figure your deduction.
Note.
When figuring the amount you can deduct for insurance premiums, do not include any advance payments shown in box 1 of Form 1099-H. Also, if you are claiming the health coverage tax credit, subtract the amount shown on Form 8885, line 4 from the total insurance premiums you paid.
Also, do not include amounts paid for health insurance coverage with retirement plan distributions that were tax-free because you are a retired public safety officer.
The health coverage tax credit is available to certain individuals who receive a pension benefit from the Pension Benefit Guaranty Corporation (PBGC) or are eligible trade adjustment assistance (TAA) recipients or eligible alternative trade adjustment assistance (alternative TAA) recipients.
You can take this credit for any month in which all of the following were true on the first day of the month.
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You were an eligible:
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Trade adjustment assistance (TAA) recipient,
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Alternative TAA recipient, or
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Pension Benefit Guaranty Corporation (PBGC) pension recipient.
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You paid the premium for qualified health insurance coverage for yourself. See Qualified Health Insurance , later.
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You were not imprisoned under federal, state, or local authority.
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You did not have other specified coverage. See Other Specified Coverage, later.
You were an eligible TAA recipient on the first day of the month if, for any day in that month or the prior month, you:
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Received a trade readjustment allowance, or
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Would have been entitled to receive such an allowance except that you had not exhausted all rights to any unemployment insurance (except additional compensation that is funded by a state and is not reimbursed from any federal funds) to which you were entitled (or would be entitled if you applied).
You were an eligible alternative TAA recipient on the first day of the month if, for that month or the prior month, you received benefits under an alternative trade adjustment assistance program for older workers established by the Department of Labor.
Example.
You received benefits under an alternative trade adjustment assistance program for older workers for October 2008. The program was established by the Department of Labor. You were an eligible alternative TAA recipient on the first day of October and November.
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Are covered by a qualifying certification,
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Are reemployed not more than 26 weeks after the date of separation from the adversely affected employment,
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Are at least 50 years of age,
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Do not earn more than $50,000 a year in wages from reemployment,
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Are employed on a full-time basis, and
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Do not return to the employment from which you were separated.
You were an eligible PBGC pension recipient on the first day of the month, if both of the following apply.
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You were age 55 or older on the first day of the month.
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You received a benefit for that month that was paid by the PBGC under title IV of the Employee Retirement Income Security Act of 1974 (ERISA).
You can include the premiums you pay for qualified health insurance for qualifying family members in figuring your credit. A qualifying family member is:
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Your spouse (but see Married persons filing separate returns below), or
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Anyone whom you can claim as a dependent on your tax return. (For children whose parents are divorced, see Children of divorced parents, later.)
However, anyone who has other specified coverage (defined later), is not a qualifying family member.
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Your spouse was an eligible TAA recipient, alternative TAA recipient, or PBGC pension recipient during the year.
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All of the following apply:
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You lived apart from your spouse during the last 6 months of the year.
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A qualifying family member (other than your spouse) lived in your home for more than half the year.
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You provided over half the cost of keeping up your home.
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You file a separate return.
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Your home is the home for more than half the year of a dependent under age 13 or a dependent who is physically or mentally not able to care for himself or herself.
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You pay more than half the cost of keeping up your home for the year.
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Your spouse does not live in your home for the last 6 months of the year.
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The parents are divorced or legally separated or lived apart at all times during the last 6 months of the year.
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The child received over half of his or her support for the year from the parents (without regard to the rules on multiple support agreements). See the discussion of multiple support agreements at Support claimed under a multiple support agreement earlier under Whose Medical Expenses Can You Include.
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The child is in custody of one or both of the parents for more than half of the year.
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A decree of divorce or separate maintenance or written separation agreement that applies to 2008 provides that (a) the noncustodial parent can claim the exemption for the child, or (b) the custodial parent will sign a written declaration that he or she will not claim the child as a dependent for 2008. If the divorce or separation agreement went into effect before 1985, this requirement is met if the noncustodial parent provides at least $600 for the support of the child for the year.
The following health insurance qualifies for the credit.
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COBRA continuation coverage. (This is coverage that employers with 20 or more employees must offer to employees or former employees and their beneficiaries who have lost coverage because of certain events.)
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Coverage under a group health plan that is available through the employment of your spouse. (But see Other Specified Coverage , later.)
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Coverage under an individual health insurance policy if you were covered during the entire 30-day period that ends on the date you separated from the employment which qualified you for the allowance or benefit as an eligible individual (defined earlier). For this purpose, coverage under an individual health insurance policy includes medical insurance offered to individuals and their families, but does not include coverage under a federal, state, or other group health insurance policy.
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State-based continuation coverage provided by the state under a state law that requires such coverage.
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Coverage offered through a qualified state high-risk pool.
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Coverage under a health insurance program offered to state employees or a similar state-based health insurance program.
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Coverage through an arrangement entered into by the state and a group health plan, an issuer of health insurance coverage, an administrator, or an employer.
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Coverage offered through a state arrangement with a private sector health care coverage purchasing pool.
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Coverage under a state-operated health plan that does not receive any federal financial participation.
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Visit the website, www.irs.gov, type “hctc: list of state-qualified health plans” in the search box, click on “search,” and then, click on HCTC: List of State-Qualified Health Plans, or
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You can call 1-866-628-4282 (tollfree) (or TDD/TTY 1-866-626-4282).
The following health insurance does not qualify for the credit.
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Medicare supplemental (Medigap) insurance, Tricare supplemental insurance, or similar supplemental insurance to an employer-sponsored group health plan.
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Any insurance if substantially all of the coverage is:
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Coverage for on-site medical clinics,
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Hospital indemnity or other fixed indemnity insurance,
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Accident or disability income insurance (or a combination of the two),
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Liability insurance,
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A supplement to liability insurance,
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Workers' compensation or similar insurance,
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Automobile medical payment insurance,
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Credit-only insurance,
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Limited scope dental or vision benefits,
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Benefits for long-term care, nursing home care, home health care, community-based care (or any combination), or
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Coverage for only a specified disease or illness.
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Coverage under a flexible spending or similar arrangement.
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The charge for insurance for yourself and qualifying family members is either separately stated in the contract or furnished to you by the insurance company in a separate statement.
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The amount you paid for insurance for yourself and qualifying family members is not more than the charge that is stated in the contract or furnished by the insurance company.
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The amount stated in the contract or furnished by the insurance company is not unreasonably large in relation to the total charges under the contract.
Eligibility for the credit is determined on a monthly basis. An eligible coverage month is any month in which, as of the first day of the month, you:
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Are an eligible TAA recipient, eligible alternative TAA recipient, or eligible PBGC recipient (see TAA Recipient , Alternative TAA Recipient , or PBGC Pension Recipient earlier),
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Are covered by qualified health insurance (defined earlier) that you pay for,
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Do not have other specified coverage (defined later), and
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Are not imprisoned under federal, state, or local authority.
If you file a joint return, only one spouse has to satisfy the requirements.
Even if you are otherwise eligible, you are not eligible for the credit for a month if, as of the first day of the month, you have other specified coverage. Other specified coverage is coverage under the following.
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Any insurance which constitutes medical care (unless substantially all of that insurance is for benefits listed earlier under (1) or (2) under Nonqualified Health Insurance ) if at least 50% of the cost of the coverage is paid by an employer (or former employer) of you or your spouse.
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Any of the following government health programs:
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Medicare Part A or Part B,
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Medicaid, or the State Children's Health Insurance Program (SCHIP),
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The Federal Employees Health Benefit Plan (FEHBP), or
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Tricare, the medical and dental care program for members and certain former members of the uniformed services and their dependents.
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Covered by Medicare, or
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Covered by a group health plan available through your or your spouse's employer and the employer contributes 50% or more of the premium.
To claim the credit, complete Form 8885, and attach it to your Form 1040; Form 1040NR, U.S. Nonresident Alien Income Tax Return; Form 1040-SS, U.S. Self-Employment Tax Return; or Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre al Trabajo por Cuenta Propia. You cannot claim the credit on Form 1040A, Form 1040EZ, or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents.
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A copy of your health insurance bills or COBRA payment coupons. The bills must have:
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Your name,
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The name of your health plan,
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Your monthly premium amount,
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Dates of coverage, and
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Your health plan identification number.
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Proof of payment, such as:
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Canceled checks,
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Bank statements, or
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Credit card statements.
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A copy of your completed and signed COBRA Election Letter. It may also be called a COBRA Enrollment Form, Application Form, Enrollment Application for Continuing Coverage, or Election Agreement.
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A letter from your former employer or COBRA administrator saying you have COBRA coverage. The letter must have:
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The COBRA coverage start and end dates,
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Name of the health plan,
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Your home address, and
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Covered family members, their dates of birth, their relationship to you, and their social security numbers.
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A copy of “Notice of Rights to Continue Coverage.” Your former employer should have provided you with a copy of this notice.
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A letter or other document from your former employer or your unemployment office that shows the date you left your job.
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A document from your health plan that shows your first date of coverage. Your first day of coverage in a non-group (individual) health plan must have been at least 30 days before you left your job.
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Copies of paycheck stubs showing the health coverage deductions for the qualified months.
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A letter or other statement from your spouse's employer that states the employer contributed less than 50% of the cost of the coverage.
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Health Savings Accounts (HSAs), or
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Archer Medical Savings Accounts (MSAs).
The HCTC credit is refundable. You can claim the full credit even if you do not owe any taxes or earn any income. To get the credit, you must:
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Qualify for the credit, and
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File a tax return, even if you:
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Do not owe any tax,
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Did not earn enough money to file a return, or
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Did not have income taxes withheld from your pay.
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See How To Report earlier for instructions on how to claim this credit.
You can either take this credit on your tax return or have it paid on your behalf in advance to your insurance company. Your payments and any payments paid on your behalf in advance are treated as having been made on the first day of the month for which they are made.
You can get your credit in advance by calling the HCTC customer contact center at 1-866-628-4282 (tollfree) (or TDD/TTY 1-866-626-4282) to register. The Treasury Department will pay your insurer 65% of your health insurance premiums as you pay the remaining 35%.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
www.aarp.org/money/taxaide. For more information on these programs, go to
www.irs.gov and enter keyword “VITA” in the upper right-hand corner.
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E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
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Check the status of your 2008 refund. Go to www.irs.gov and click on Where's My Refund. Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Have your 2008 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund.
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Download forms, instructions, and publications.
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Order IRS products online.
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Research your tax questions online.
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Search publications online by topic or keyword.
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View Internal Revenue Bulletins (IRBs) published in the last few years.
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Figure your withholding allowances using the withholding calculator online at www.irs.gov/individuals.
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Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant.
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Sign up to receive local and national tax news by email.
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Get information on starting and operating a small business.
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Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should receive your order within 10 days.
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Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
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Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
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TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
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TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
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Refund information. To check the status of your 2008 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Have your 2008 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Refunds are sent out weekly on Fridays. If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back.
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Other refund information. To check the status of a prior year refund or amended return refund, call 1-800-829-1954.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to listen in on or record random telephone calls. Another is to ask some callers to complete a short survey at the end of the call. Walk-in. Many products and services are available on a walk-in basis.
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Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
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Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary—just walk in. If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. All other issues will be handled without an appointment. To find the number of your local office, go to
www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613
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Current-year forms, instructions, and publications.
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Prior-year forms, instructions, and publications.
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Tax Map: an electronic research tool and finding aid.
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Tax law frequently asked questions.
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Tax Topics from the IRS telephone response system.
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Internal Revenue Code—Title 26 of the U.S. Code.
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Fill-in, print, and save features for most tax forms.
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Internal Revenue Bulletins.
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Toll-free and email technical support.
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Two releases during the year.
– The first release will ship the beginning of January 2009.
– The final release will ship the beginning of March 2009.
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Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
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All the business tax forms, instructions, and publications needed to successfully manage a business.
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Tax law changes for 2009.
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Tax Map: an electronic research tool and finding aid.
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Web links to various government agencies, business associations, and IRS organizations.
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“Rate the Product” survey—your opportunity to suggest changes for future editions.
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A site map of the guide to help you navigate the pages with ease.
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An interactive “Teens in Biz” module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes.
www.irs.gov and enter keyword “SBRG” in the upper right-hand corner for more information.
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