Can I Deduct Medical Expenses Paid by Someone Else on My Taxes?

Medical expenses can be a significant financial burden, and tax deductions can help offset some of the costs. However, if someone else pays your medical bills, your ability to claim those expenses depends on various factors, including who made the payment and their relationship to you.

Deduction Requirements

To qualify for a medical expense deduction, costs must meet IRS criteria under Section 213(d) of the Internal Revenue Code. Eligible expenses include payments for diagnosis, treatment, disease prevention, and transportation primarily for medical care. Cosmetic procedures are generally excluded unless they correct a deformity or injury.

Deductions apply in the tax year the expenses were paid, following a cash basis accounting method. For instance, if you received treatment in December 2023 but paid the bill in January 2024, the deduction would apply to your 2024 tax return.

Medical expenses must exceed 7.5% of adjusted gross income (AGI) to be deductible. If your AGI is $50,000, only costs above $3,750 qualify. This threshold means minor expenses often do not provide a tax benefit unless they are significant relative to income.

Relationship Between Taxpayer and Payer

The IRS allows deductions for medical expenses paid for yourself, your spouse, or your dependents. If someone else covers the cost, eligibility depends on their relationship to the person receiving care.

Parents paying for a child’s medical expenses may still claim a deduction, even if the child is not a dependent, as long as they would have qualified except for the gross income test. This is common for adult children who are students or have their own earnings. For example, if a parent pays $5,000 for a 22-year-old child’s surgery and the child meets all other dependency criteria except for income, the parent may claim the deduction.

Medical expenses paid under a multiple support agreement may also be deductible. If multiple individuals contribute to a person’s support, the one paying the medical bills may qualify for the deduction if they provide more than 10% of total support and meet IRS dependency rules. This often applies when siblings collectively support an aging parent. If one sibling covers medical costs while others contribute to housing or food, the sibling paying medical expenses may claim the deduction if a formal multiple support declaration (IRS Form 2120) is filed.

For married couples filing jointly, medical expenses paid from either spouse’s income qualify, regardless of whose name is on the bill. However, for those filing separately, each spouse can only deduct expenses they personally paid unless one qualifies as the other’s dependent.

Insurance or Reimbursement Implications

Medical expense deductions apply only to costs not reimbursed by insurance or any other source. If an insurance company covers part of a bill, only the out-of-pocket amount is deductible. Attempting to deduct reimbursed expenses can trigger IRS scrutiny. For example, if a taxpayer incurs $10,000 in medical expenses but receives $7,000 in insurance reimbursement, only $3,000 is deductible.

Payments from health savings accounts (HSAs) and flexible spending accounts (FSAs) cannot be deducted, as contributions to these accounts are made with pre-tax dollars. If a taxpayer pays a medical bill out-of-pocket and later receives an HSA reimbursement in a different tax year, they must adjust their deduction accordingly. If an HSA distribution occurs after filing, an amended return (Form 1040-X) may be required.

Employer-provided reimbursements, such as those from a health reimbursement arrangement (HRA), also disqualify expenses from being deducted. Since HRAs are fully employer-funded, the IRS treats these payments as though the employer covered the expense directly.

Documentation for Filing

Proper records are crucial to substantiate a medical expense deduction. Taxpayers should keep all receipts, invoices, and bank or credit card statements that show the amount paid, payment date, and provider’s name. Itemized billing statements from hospitals or doctors can further support deductions if the IRS requests verification.

For those sharing financial responsibility for medical costs, such as when multiple family members contribute, a written agreement or proof of payment distribution is useful. If payments were made on behalf of another individual, documentation like canceled checks or electronic payment confirmations can help establish eligibility for the deduction. This is especially important when relatives split costs, as the IRS may question who holds the right to claim them.