Don’t Overlook Medical Dependents

Posted by Lee Reams Sr. on

Medical expenses paid for dependents may be deducted by a taxpayer. To claim these expenses, the person must have been a dependent (qualified child or qualifying relative) either at the time the medical services were provided or at the time the expenses were paid.

For medical purposes, an individual may be a dependent even if his gross income precludes a dependency exemption. (IRC § 213(a);Reg §1.213-1(a)(3)(i)) 

Example – The taxpayers’ adult son was seriously injured in a motorcycle accident and did not have medical insurance.  His parents paid all of his medical expenses for the year.  Their son meets all of the dependent qualifications except for the gross income test.  However, under the exception, the parents can still deduct the medical expenses on their 1040.

A person generally qualifies as a dependent for purposes of the medical expense deduction if that person was a U.S. citizen or national, or a resident of the U.S., Mexico or Canada, and is either a:

  • Qualifying child, defined as a child who:

1) Is the taxpayer’s son, daughter, stepchild, foster child, brother, sister, stepsibling, or a descendant of any of them;

2) At the end of the year was under age 19, under age 24 and a full-time student, or permanently disabled, and is younger than the taxpayer;

3) Lived with the taxpayer more than half of the year; and

4) Did not provide his or her own support for the year.  OR

  • Qualifying relative, defined as a person:
  • Who is the taxpayer’s son, daughter, stepchild, foster child (or one of their descendants); brother, sister (or son or daughter of either); father or mother (or ancestor or sibling of either); step-brother or step-sister, step-parent, son- or daughter-in-law, mother- or father-in-law, sister- or brother-in-law; or any other person (except spouse) who lived legally with the taxpayer all year as a member of the household;
  • For whom the taxpayer provided over half of that person's total support for the calendar year; and
  • Who is not a qualifying child.

Note that the requirements not to have (a) filed a joint return and (b) gross income in excess of the exemption amount (for a qualifying relative) are not part of the definition of a medical dependent.

Child of Divorced or Separated Parents - A child of divorced parents is considered a dependent of both parents so that each parent may deduct the medical expenses he or she pays for the child (IRC § 213(d)(5)).  

Example – Bob and Jan are divorced and have two minor children.  Jan claims the children as dependents and Bob pays their medical insurance and other medical expenses.  Under the exception, because Jan claims them as dependents, Bob can claim the children’s medical expenses he pays

Support Claimed Under a Multiple Support Agreement – A multiple support agreement is used when two or more people provide more than half of a person's support, but no one alone provides more than half.  Whoever is considered to have provided more than half of a person's support under such an agreement can deduct medical expenses paid.  Any medical expenses paid by others who joined in the agreement cannot be included as medical expenses by anyone. So it is wise to counsel the individuals to make sure the one claiming the exemption, to the extent possible, spends his or her share of the support on the deductible medical expenses.