Can You Use an FSA for Pets or Pet Expenses?

Flexible Spending Accounts (FSAs) offer a tax-advantaged way for individuals to manage certain healthcare costs. These accounts allow people to pay for eligible medical, dental, and vision expenses with pre-tax contributions. A common question for pet owners is whether these funds can be applied to pet-related expenses. Understanding FSA regulations is important for determining cost eligibility.

Understanding Flexible Spending Accounts

A Flexible Spending Account (FSA) is an employer-sponsored benefit allowing employees to set aside pre-tax money from their paycheck for qualified out-of-pocket healthcare expenses. These accounts are governed by Internal Revenue Service (IRS) rules, which dictate how the funds can be used.

FSAs operate under a “use-it-or-lose-it” rule, meaning unspent funds at the end of the plan year are generally forfeited. However, employers may offer two exceptions. One option is a grace period, allowing account holders up to an additional two and a half months after the plan year ends to incur new expenses and use remaining funds. Another option is a carryover provision, permitting a limited amount, such as up to $660 for plan years ending in 2025, to be carried over into the next plan year. Employers can offer either a grace period or a carryover, but not both.

General Rules for Eligible FSA Expenses

The eligibility of expenses for reimbursement through an FSA is determined by the Internal Revenue Service (IRS) and detailed in IRS Publication 502, “Medical and Dental Expenses.” According to IRS guidelines, “medical care” expenses must be primarily for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the human body.

Common examples of eligible expenses include doctor visits, prescription medications, dental care, and vision services such as eyeglasses and contact lenses. Funds can also be used for copayments, deductibles, and certain medical equipment or supplies. The focus remains on expenditures directly related to human health and well-being, as outlined by federal tax law.

Pet Expenses and FSA Eligibility

Flexible Spending Account funds are not eligible for pet-related expenses. This exclusion is because pets are not considered dependents for tax purposes, and their care does not fall under the IRS definition of “medical care” for the human FSA holder.

Therefore, routine veterinary care, pet food, pet insurance premiums, and general grooming services are not reimbursable through an FSA. Even over-the-counter pet medications or supplements are excluded, as they do not meet the criteria for human medical treatment. This broad ineligibility applies to most common pet ownership costs. While legislative efforts have aimed to allow limited use of FSAs for pet veterinary care and insurance, current federal tax law does not permit it.

The Service Animal Exception

A narrow exception exists for expenses related to qualified service animals. Under IRS guidelines, a service animal is defined as an animal, typically a dog, individually trained to perform tasks for the benefit of an individual with a physical, sensory, psychiatric, intellectual, or other mental disability. This definition aligns with the Americans with Disabilities Act (ADA) and distinguishes service animals from emotional support animals or therapy animals, which are not eligible.

If an animal qualifies as a service animal, certain expenses may be reimbursable through an FSA. These eligible costs include the purchase or adoption of the service animal, professional training related to its service function, and ongoing maintenance expenses such as food, grooming, and veterinary care necessary to maintain the animal’s health for its duties. These expenses must be incurred because the animal is medically necessary for the FSA holder’s specific condition. Strict documentation, often including a Letter of Medical Necessity from a healthcare professional, is required to substantiate these claims.