Do Copays Count as Medical Expenses on Taxes?
Your medical copays can be tax deductible, but only if your total healthcare costs exceed a specific percentage of your income. See how the rules apply.
Yes, the copayments you make at a doctor’s office, pharmacy, or hospital are considered medical expenses for tax purposes. These out-of-pocket costs can be used to lower your taxable income, but they are subject to limitations set by the Internal Revenue Service (IRS). The ability to deduct these and other medical costs depends on your total healthcare spending for the year and your income level.
The AGI Threshold for Medical Expense Deductions
The primary rule for the medical expense deduction is the Adjusted Gross Income (AGI) threshold. You can only deduct the amount of total qualifying medical expenses that exceeds 7.5% of your AGI. Your AGI is your gross income minus certain specific deductions, such as contributions to a traditional IRA or student loan interest, and can be found on your Form 1040.
To illustrate, consider a taxpayer with an AGI of $60,000. The first 7.5% of their income, which is $4,500, is not deductible. If this individual incurred $6,500 in total qualifying medical expenses, they would subtract the $4,500 threshold from their total expenses, leaving a deductible amount of $2,000. If their total expenses were only $4,000, they could not deduct any medical costs because the total is below the 7.5% AGI threshold.
Identifying Qualifying Medical Expenses
According to IRS Publication 502, qualifying expenses are those paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. Your copayments are included, along with a wide range of other costs.
- Payments to doctors, dentists, surgeons, chiropractors, and psychologists
- The cost of prescription medications and insulin
- Payments for medical equipment like crutches, hearing aids, and wheelchairs
- Vision care, including eye exams, prescription glasses, and contact lenses
- Transportation costs for obtaining medical care, such as bus fare, parking fees at a hospital, or mileage on your personal vehicle at the standard rate of 21 cents per mile for 2025.
Conversely, health-related spending that is disallowed includes non-prescription drugs, general wellness items like vitamins, toiletries, or cosmetic surgery that is not medically necessary.
Reimbursed and Pre-Tax Expenses
You cannot deduct expenses for which you were reimbursed. If your insurance company covers part of a medical bill, only your out-of-pocket cost can be included. Similarly, you cannot deduct medical expenses paid for using distributions from a Health Savings Account (HSA) or a Flexible Spending Arrangement (FSA). Since the money in these accounts is already tax-advantaged, deducting expenses paid from them would create a double tax benefit.
How to Claim the Deduction on Your Tax Return
To claim the medical expense deduction, you must itemize deductions on your tax return instead of taking the standard deduction. This is only beneficial if your total itemized deductions are greater than the standard deduction for your filing status. For the 2025 tax year, the standard deduction is $15,000 for single filers and $30,000 for those married filing jointly.
If your total itemized deductions, including medical costs, do not exceed this amount, you will get a larger tax benefit by taking the standard deduction. If you choose to itemize, you will report your medical expenses on Schedule A (Form 1040). You will list your total medical expenses, calculate the 7.5% AGI limitation, and determine the final deductible amount.
Throughout the year, maintain accurate records of all your medical costs. Keep receipts from pharmacies, copies of bills from providers, and explanations of benefits from your insurer to substantiate your claim.