IRS Will Allow Costs of Breast Pumps as Deductible Medical Expenses

By Alistair M. Nevius, J.D.

From the IRS

In a reversal of long-standing policy, the IRS has announced that it will treat expenses for breast pumps and supplies that assist in lactation as deductible medical expenses (Announcement 2011-14). The IRS also said that amounts that taxpayers are reimbursed for these expenses under a flexible spending arrangement, Archer MSA, health reimbursement arrangement, or health savings account will not be income to the taxpayer.

However, to be deductible, the taxpayers’ total medical expenses must still meet the 7.5% of adjusted gross income threshold and other requirements of Sec. 213.

The announcement does not offer any analysis of the IRS’s reasoning or explain why it has changed its position. It simply states that breast pumps and supplies that assist in lactation “are for the purpose of affecting a structure or function of the body of the lactating woman” and therefore are deductible under Sec. 213(d). Previously, the IRS had characterized breast pumps as “merely beneficial to general health, but are not for the purpose of affecting any structure or function of the body” (letter from Gregory F. Jenner, Acting Assistant (Tax Policy) (6/8/04)).

As recently as May 2009, the IRS position was that “[i]t is not within the authority of the Internal Revenue Service to classify breastfeeding equipment as medical care in contravention of current law. A change to the Internal Revenue Code must be made by Congress” (IRS Information Letter 2010-0173 (5/23/09)).

In early March, the IRS posted an updated Publication 502, Medical and Dental Expenses, reflecting this change.

Newsletter Articles

SPONSORED REPORT

States look to unclaimed property for revenue

State audits of abandoned and unclaimed property (AUP) have exploded in recent years. This report outlines the escheat process, common types of AUP, how different states are handling it and how companies can plan for potential audits and liabilities.

PRACTICE MANAGEMENT

Tax software survey

Our annual survey offers a look at how CPAs judged their tax preparation software in a wide range of types of practices.