IRS Provides Factors for Qualified Medical Expense Determination

UIL: 213.00-00
Release Date: 3/29/2019

Date: December 18, 2018

Refer Reply To: CC:ITA:B02 - GENIN-135334-18

Attention: * * *

Dear * * *:

This letter responds to your request for information dated October 09, 2018. On behalf of the * * *, you requested guidance on categorizing costs for menstrual care products as qualified medical expenses under health savings accounts (HSAs), flexible spending accounts (FSAs), and other tax-preferred accounts. Although we cannot answer your specific question regarding costs for menstrual care products, we can provide you with general information regarding the application of section 213.

Section 213(a) allows taxpayers to deduct expenses paid for medical care of the taxpayer¹ to the extent the expenses exceed 7.5 percent of the taxpayer's adjusted gross income. As relevant here, section 213(d)(1)(A) defines medical care as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or function of the body.

Under Treasury Regulation section 1.213-1(e)(1)(ii), deductions under section 213 are limited to expenses paid primarily for the prevention or alleviation of a physical or mental defect or illness. In addition, section 262 and Treasury Regulation section 1.213-1(e)(1)(vi) prohibit taxpayers from deducting personal, family, or living expenses as medical care if the expenses do not fall within the section 213 definition. An expenditure that is merely beneficial to the general health of an individual is personal and is not for medical care under Treasury Regulation section 1.213-1(e)(1)(ii).

Taxpayers should use objective factors to determine whether an expense that is typically personal in nature was incurred by the taxpayer for medical care. Such factors may include:

• The taxpayer's motive or purpose for making the expenditure

• A physician's diagnosis of a medical condition and recommendation of the item as treatment or mitigation

• The relationship between the treatment and the illness

• The treatment's effectiveness

• The proximity in time to the onset or recurrence of a disease.

See, e.g., Havey v. Commissioner, 12 T.C. 409, 412 (1949).

Typically a personal expense will only be considered an expense for medical care if the taxpayer would not have incurred the expense but for the taxpayer's disease or illness. Jacobs v. Commissioner, 62 T.C. 813, 819 (1974).

Items that have no purpose other than to treat a specific disease, illness, or mental defect may qualify as a deductible medical expense. See, e.g., Rev. Rul. 2002-19, 2002-1 C.B. 778 (holding that the cost of a weight loss program is a deductible medical expense if the program is used to treat a specific disease or ailment); cf. Rev. Rul. 79-151, 1979-1 C.B. 116 (holding that the cost of a weight loss program is not a deductible medical expense if the program is used for improving general health unrelated to a specific disease or ailment). However, amounts expended for the preservation of general health or for the alleviation of physical or mental discomfort which is unrelated to some particular disease or defect are not expenses for medical care. Rev. Rul. 55-561, 1955-1 C.B. 307 (Maternity clothing, antiseptic diaper service, wigs, toothpaste held to be personal expenses).

In short, some things to consider to determine whether the costs of menstrual products are deductible as medical expenses are: whether the menstrual products are paid for treating, mitigating, or diagnosing the taxpayer's disease; whether the costs are merely beneficial to the taxpayer's general health such that they might be considered the taxpayer's personal expense; and whether the taxpayer would not have incurred that expense but for the taxpayer's medical condition.

This letter is intended for informational purposes only and does not constitute a ruling under section 2.04 of Rev. Proc. 2018-1, 2018-1 I.R.B. 1, 9, but I hope the information is helpful. If you have any additional questions, please contact * * * at * * *.

Sincerely,

Bridget E. Tombul
Branch Chief, Branch 2
Office of Associate Chief Counsel
(Income Tax & Accounting)