Feb 11, 2025

IRS Warnings Regarding Health and Wellness Deductions

The IRS is reminding taxpayers that personal expenses pertaining to health and wellness cannot be deducted or reimbursed. Read through to understand why they are not considered expenses for medical care under the Internal Revenue Code.

According to the IRS, personal expenses related to health and wellness are not viewed as medical expenses. Similarly, if you have a health flexible spending account or reimbursement arrangements for wellness purchases, according to U.S. tax laws you cannot deduct personal health expenses. The same is true if you have a health savings account or a medical savings account.

What you need to know about health and wellness tax deductions

The IRS wants people to know that you might be misunderstanding the circumstances under which health and wellness expenses are eligible for reimbursement through flexible spending arrangements.

This also applies to the following health spending plans:

• Health savings accounts
• Health reimbursement arrangements
• Medical savings accounts

For taxpayers

As a taxpayer, it is imperative that you carefully follow the rules as established by the IRS. According to IRS Commissioner Danny Werfel, legitimate medical expenses are eligible for reimbursement. He makes it clear that people are often misled into believing that certain health and wellness expenditures qualify for reimbursement because this type of personal spending is not categorized as a medical expense.

For businesses

Werfel also notes that companies need to hold themselves accountable when explaining health information to taxpaying employees. He says that businesses play a major role in misunderstandings pertaining to health and wellness deductions, so ensuring that the right information is relayed to taxpayers is key.

What defines a personal expense?

A health- or wellness-related personal expense in the eyes of the IRS is a purchase related to a diagnosis-specific activity or treatment option. For example, let’s say there’s a man who has diabetes, and he is trying to control his blood sugar by eating low-carb foods. He sees an advertisement from a company that says he can use pretax dollars from his FSA to buy healthy food as long as he contacts the company.

In turn, that company promises to give him a doctor’s note in exchange for a small fee, and that doctor’s note can be submitted to his FSA provider for reimbursement on the costs of the healthy food that he bought.

However, this is thoroughly misrepresentative of reality. If he were to pay the company a small fee and then submit the doctor’s note to his FSA provider, his claim would be denied because food is not a reimbursable medical expense.

What to do if you have questions about health and wellness tax deductions

If you still have questions about the difference between purchases pertaining to health and wellness versus medical expenses, the IRS recommends that taxpayers take a look at the FAQ section in Section 213 of the Internal Revenue Code. The information there will help you determine whether a certain food or wellness purchase is considered a medical expense.

Under IR Code 213, medical care is defined as the amount of money you pay for the diagnosis, cure, mitigation, treatment or prevention of certain diseases. Otherwise, if you have medical expenses that stem from general health and wellness — not diagnosed illnesses — they cannot be included as tax-deductible or reimbursable medical expenses.

For additional information about the deductibility of medical expenses, check out the IRS’ Publication 502 and Tax Topic 502, Medical and Dental Expenses. Likewise, if you need more details about HSAs, FSAs, HRAs or Archer MSAs, take a look at the IRS’ Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.

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