The floor under a medical expense deduction

Three limits in a single sentence

The operative provision is short enough to read whole, and it contains three separate restrictions rather than one.

A deduction is allowed for the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, a spouse, or a dependent as the statute defines that term, to the extent that such expenses exceed a stated percentage of adjusted gross income. The statute prints that percentage as seven and a half.

The first limit is timing and payment: expenses paid during the taxable year. The second is the compensation clause: amounts covered by insurance or otherwise are outside it. The third is the floor: only the part above the stated percentage of adjusted gross income counts.

That percentage is written into the statute rather than adjusted annually, and the current published guidance repeats it in the same terms. Some other figures in the same section are indexed, and this article prints none of them.

This site does not give tax advice, and nothing here says what any reader may deduct. What follows is a description of what the published rules say.

What the statute means by medical care

Almost everything turns on a defined term, and the definition is a list.

Medical care means amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body.

It also covers amounts paid for transportation primarily for and essential to that care, for qualified long-term care services as separately defined, and for insurance covering the care described in the first two categories or for a qualified long-term care insurance contract.

The published guidance states the same definition in ordinary words and adds that these expenses include payments for legal medical services rendered by physicians, surgeons, dentists and other medical practitioners, and the costs of equipment, supplies and diagnostic devices needed for those purposes.

The phrase "affecting any structure or function of the body" is the widest part of the definition, and it is the reason the exclusions that follow are drafted so specifically. Without them the definition would swallow a great deal.

Where long-term care premiums are involved, the statute caps the amount taken into account by an age-banded table whose figures are increased each year by a medical care cost adjustment. No amount from that table is printed here, and no current-year figure is asserted anywhere in this article.

The drug limitation is the one that matters in this category

One subsection deals only with medicines, and it is the provision most relevant to anything bought in a cash-pay health market.

An amount paid during the taxable year for medicine or a drug is taken into account only if the medicine or drug is a prescribed drug, or is insulin.

The statute then defines the term. A prescribed drug means a drug or biological which requires a prescription of a physician for its use by an individual.

The published guidance says the same thing from the taxpayer's side: amounts paid for prescribed medicines and drugs can be included, a prescribed drug is one that requires a prescription by a doctor for its use by an individual, insulin can be included, and except for insulin, amounts paid for a drug that is not prescribed cannot be.

Notice what the test is not. It does not ask whether a product is approved, whether it works, or how it is marketed. It asks whether a prescription is required for its use by an individual.

A separate article on this site develops the consequence of that for a category where approval status and prescription status frequently come apart. The point here is narrower: the drug limitation is a prescription test and nothing else.

The exclusions that catch adjacent products

Three exclusions in the published material land close to this market, and they are worth reading in their own words.

Cosmetic surgery. Medical care does not include cosmetic surgery or other similar procedures unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease. Cosmetic surgery is defined as any procedure directed at improving the patient's appearance that does not meaningfully promote the proper function of the body or prevent or treat illness or disease.

Supplements. The guidance states that the cost of nutritional supplements, vitamins, herbal supplements and so-called natural medicines cannot be included unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician, because these items are taken to maintain ordinary good health and are not for medical care.

Personal use items. The cost of an item ordinarily used for personal, living or family purposes cannot be included unless it is used primarily to prevent or alleviate a physical or mental disability or illness.

And one more that this corpus has particular reason to note. The guidance states that in general the cost of a prescribed drug brought in, or ordered and shipped, from another country cannot be included, and that only the cost of a drug imported legally can be. This site covers the rules on importing separately.

Reimbursement, timing and the coordination rules

The compensation clause in the operative sentence is developed at length in the published guidance, and it is where double counting is prevented.

Only amounts paid during the tax year for which no insurance or other reimbursement was received can be included. Total medical expenses for the year have to be reduced by all reimbursements for medical expenses received from insurance or other sources during the year, and the guidance states that this includes payments from a public programme. Even where a policy reimburses only certain specific expenses, amounts received under it reduce the total, including the parts it does not reimburse.

Timing has its own rules. Only expenses paid this year count, generally not payments for care to be received in a future year, and the guidance notes that this is not the rule for determining whether an expense can be reimbursed by a flexible spending arrangement. Where a credit card is used, the expense is included in the year the charge is made rather than the year the card balance is paid.

A separate statute prevents a second overlap. A payment or distribution out of a health savings account for qualified medical expenses is not treated as an expense paid for medical care when the deduction is worked out.

The picture that emerges is of a rule with several independent filters. An expense has to be for medical care as defined, has to be paid in the year, must not have been compensated, must not have been paid from a tax-advantaged account, and only the part above the statutory percentage of adjusted gross income is reached at all.

Whether any particular purchase clears those filters is a question about that purchase and that taxpayer. This site does not give tax advice, and anyone relying on a deduction should take the question to a tax adviser.

Sources

Each document below is named as it names itself, with the date printed on that document rather than the day it was read.

1. United States Code Title 26, Section 213, Medical, dental, etc., expenses — read at subsection (a), the allowance and the adjusted gross income floor; (b), the limitation with respect to medicine and drugs; (d)(1), the definition of medical care; (d)(3), prescribed drug; (d)(9), cosmetic surgery; and (d)(10), eligible long-term care premiums and their indexing, 2024 Main Edition — Office of the Law Revision Counsel, U.S. House of Representatives, January 2025
2. Publication 502 (2025), Medical and Dental Expenses, for use in preparing 2025 returns — read at What Are Medical Expenses, Medicines, Nutritional Supplements, Personal Use Items, Medicines and Drugs From Other Countries, and How Do You Treat Reimbursements — Internal Revenue Service, January 2025
3. United States Code Title 26, Section 223, Health savings accounts — read at subsection (f)(6), the coordination rule providing that a payment or distribution out of a health savings account for qualified medical expenses is not treated as an expense paid for medical care under section 213, 2024 Main Edition — Office of the Law Revision Counsel, U.S. House of Representatives, January 2025