IRS Section 213(d) Rules for Medical Expense Deductions

Federal tax law provides specific guidance on what constitutes a health-related cost for tax purposes in Internal Revenue Code (IRC) Section 213(d). This section of the tax code offers the official definition of “medical care” and dictates which costs are eligible for a tax benefit.

The definition is broad, encompassing payments for the diagnosis, cure, mitigation, treatment, or prevention of disease. It also includes costs for treatments affecting any structure or function of the body. The primary purpose of the expense must be to address a specific health issue, not just to benefit general wellness.

The Scope of “Medical Care”

Qualified Expenses

A broad range of payments are recognized as qualified medical expenses. These include fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, and other medical practitioners. Hospital services, inpatient care, and nursing services also fall under this definition, as do the costs of prescription drugs and insulin.

Beyond direct treatment, the definition extends to equipment and diagnostic tools. This includes items like false teeth, hearing aids, crutches, and wheelchairs, along with diagnostic devices such as blood sugar test kits. The costs of medical examinations, X-ray services, and laboratory tests are qualified, as is preventative care like vaccinations and physical exams.

Certain therapies for specific conditions are also included. For example, inpatient treatment at a therapeutic center for alcohol or drug addiction is a qualified expense. Smoking cessation programs are also considered medical care.

Non-Qualified Expenses

Many health-related purchases are not considered medical care for tax purposes. A major exclusion is cosmetic surgery, which includes any procedure directed at improving a patient’s appearance that does not promote the proper function of the body or treat an illness. This includes procedures like face-lifts or liposuction.

Expenses that are only beneficial to general health do not qualify. This includes vitamins, diet foods, or health club memberships, unless prescribed by a physician to treat a specific medical condition. For instance, a supplement to treat a diagnosed deficiency may qualify, but general vitamin use does not. Non-prescription drugs, other than insulin, are also not qualified medical expenses.

Other non-qualified expenses include personal use items such as toothpaste, toiletries, or cosmetics. Maternity clothes and diaper services are also considered personal expenses rather than medical ones.

Rules for Special Expense Categories

Transportation and Lodging

The cost of transportation primarily for medical care is a medical expense. This includes ambulance services and fares for taxis, buses, or trains. If using a personal vehicle, you can include out-of-pocket costs like gas and oil or use the standard medical mileage rate, which is 21 cents per mile for 2025. Parking fees and tolls can be added to either method.

Lodging costs while away from home for medical care can be included, but they are subject to limits. The lodging must be at a hospital or a similar facility. Otherwise, the amount is capped at $50 per night for each person, which includes the person receiving care and a necessary companion, such as a parent.

Capital Expenses

Capital expenses for medical care involve improvements to your home or property, such as adding entrance ramps or installing stair lifts. These are allowable if their main purpose is medical care for yourself, your spouse, or a dependent. The deductible amount is limited to the cost of the improvement that exceeds any increase in your property’s value.

For example, if a $30,000 elevator installation increases your home’s value by $22,000, you can include the $8,000 difference as a medical expense. Some improvements may not increase a home’s value and can be fully included. The costs to operate and maintain a medically necessary capital asset are also deductible.

Long-Term Care

Qualified long-term care services are considered medical care. These include a range of diagnostic, therapeutic, and personal care services required by a chronically ill individual. The services must be provided under a plan of care prescribed by a licensed health care practitioner.

Premiums for a qualified long-term care insurance contract are also includible as medical expenses, subject to annual, age-based limits. For 2025, the limit for individuals aged 61 to 70 is $4,810, and for those over 70, it is $6,020. These limits are indexed for inflation.

Using Medical Expenses for Tax Benefits

After determining which costs meet the tax code’s definition of medical care, you can use them for a tax benefit. The primary methods are itemizing deductions on your tax return or using tax-advantaged health accounts. The same definition of medical care applies to both methods.

Itemized Deductions

To deduct medical expenses, you must itemize deductions on Schedule A of Form 1040, which is only beneficial if your total itemized deductions exceed the standard deduction. A limitation is the 7.5% of Adjusted Gross Income (AGI) threshold, meaning you can only deduct medical expenses that exceed this amount.

For example, with an AGI of $60,000, the threshold is $4,500. If you have $7,000 in qualified medical expenses, you can deduct $2,500. The expenses must have been paid during the tax year, regardless of when the services were provided.

Tax-Advantaged Accounts

The established definition of medical care is also the standard for qualified distributions from Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs), and Health Reimbursement Arrangements (HRAs). When you use funds from these accounts to pay for qualified medical costs, the distributions are tax-free.

This means you can use an HSA to pay for dental treatments or prescriptions without tax consequences. However, using funds for non-qualified expenses, like cosmetic surgery, would result in the distribution being taxable and potentially subject to a penalty.