Many expenses related to fertility treatments, prenatal care, delivery and postnatal care are tax-deductible. Learn what costs are tax-deductible and what you need to do, in this 30-minute webinar with Jeff Buffum, CFP. Watch it below - and don't miss the Q&A at the end of this article.
What you'll learn in the fertility, pregnancy & tax webinar:
- What types of expenses related to fertility treatments and pregnancy are tax-deductible, as well as what aren't.
- What records you need to keep in order to claim tax deductions.
- Standard vs. itemized deductions - which way to go in order to receive fertility- and pregnancy-related tax deductions.
Wealth Management Advisor, Buffum Wealth Management, Northwestern Mutual
Jeff Buffum is a Certified Financial Planner and Chartered Financial Consultant, specializing in providing comprehensive financial guidance to rising and successful professionals, entrepreneurs and new families. A founding member of Angel Compass Network for Charity, Jeff also raises money for local charities focused on children.
Having recently welcomed a new baby to his family, Jeff has a personal perspective in financial considerations for those who are in the family-building phase.
Originally Aired On:
April 27, 2021
Post-Webinar Q&A on Fertility Treatment Costs & Tax Deductions
Can you deduct supplements? Do they need to be certain types?
Yes, supplements can be tax-deductible. To be eligible, the supplements have to be recommended by your healthcare provider as a treatment for a specific condition. For example, if your doctor recommends that you take DHEA for diminished ovarian reserve, that’s tax-deductible. If it’s a supplement you take on your own for general health, it’s not tax-deductible.
Would you recommend against getting a medical loan for fertility treatments? If I do, can I deduct loan payments from my taxes?
This will depend on the size of the loan and the loan interest. You would want to avoid taking a loan where the interest exceeds approximately 5-6% as it will become very expensive over time.
You can deduct the medical expenses over 7.5% of your adjusted gross income (AGI) even if you take out a loan. Meaning, if you take out a loan for $10,000, and that’s what exceeds 7.5% of your AGI, then the $10,000 is deductible in the year you incur that expense, not the year when you pay off the loan. You would have to consult with an accountant as to whether the loan interest in subsequent years is tax deductible as it would need to be a part of your itemized deductions.
I’ve been told by my company that they don’t have to cover fertility treatments because the company is Canadian. Is it true that the NY insurance mandate for fertility coverage only applies to NY-based companies?
Yes, that’s true. Unfortunately, the NY mandate does only apply to NY-based companies.
For more information about fertility coverage mandate in different states, Resolve has an extensive list here.
Can you claim expenses related to surrogacy? Do you need a private letter ruling?
Surrogacy is generally not deductible. However, yes, in order to claim a deduction you would need a private letter ruling from the IRS.
Can medical expenses made overseas be included in tax deductions? Do we need any special documentation to do so?
This should be tax deductible because the US imposes taxes on all overseas assets, so they should include overseas medical expenses in the calculation for deductible medical expenses as it relates to your US taxes. Best to confirm with your accountant and make sure to obtain a proper receipt.
If your income is too high, what are the other options to get tax benefits for IVF expenses?
This is the reason why expenses are limited to 7.5% of AGI, as tax benefits tend to phase out or become harder to achieve for higher income earners and easier to achieve for lesser income earners. However, to the extent the medical expenses exceed 7.5% then it would be tax deductible.
If IVF fees have to be pre-paid in December but the actual procedure is in January of next year, does it count as deduction for tax return when we paid, or when we receive the procedure?
This is a common situation. The deduction would be applied in the year the expense is incurred, so in this case it would be December.
Can you claim tax deductions for medial expenses incurred for a natural pregnancy (after conception up to delivery)?
Absolutely. Costs related to prenatal care, delivery and postnatal care are tax-deductible, as long as they are your out-of-pocket expenses. The portion of the pregnancy care that’s covered by your health insurance won’t be tax-deductible.
Lastly, the Fine Print
This article is for general informational purposes only, and are not intended to provide specific advice or recommendations for anyone. It is only intended to provide education, and should not be relied on as tax or accounting advice. For tax or accounting advice specific to you, please consult your own tax or accounting advisors.