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Medical-Care Deductions for Meals and Lodgings: What Your Clients Should Know

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Mar 30th 2015
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Special rules apply to medical-care deductions for lodging expenses while away from home. As a general rule, meals and lodgings are deductible as medical expenses only if incurred in a hospital or similar institution.

Formerly, that restriction eliminated any deduction for the cost of a stay at a hotel while away from home to obtain outpatient treatment at a hospital – for instance, chemotherapy treatment for cancer patients. This held true even when outpatient care was less expensive than inpatient care and also when the patient was incapable of traveling alone and had to be accompanied by another person, as in the case of an infant accompanied by a parent.

Now, however, there is a measure of relief. Internal Revenue Code Section 213(d) (2) allows a deduction of up to $50 per day for away-from-home lodgings to receive outpatient treatment. To qualify, such lodgings must be “primarily for and essential to medical care provided by a physician” in a hospital or a similar facility, such as the Mayo Clinic in Rochester, Minnesota, or the Hospital for Special Surgery in New York City.

But no deduction at all is allowed for hotel rooms or other lodgings that are “lavish or extravagant under the circumstances” or if there’s any “significant element of personal pleasure, recreation, or vacation in the travel away from home.” Put more plainly, no tax break is allowed for what’s actually a vacation. Moreover, outlays other than lodgings, such as food, remain nondeductible.

On the plus side, the $50 ceiling is on a per-person basis. Take the situation of a parent who accompanies a dependent child on a trip for medical reasons. The per-day deduction for their stay at a hotel is a maximum of $100.

In figuring allowable deductions for travel and other medical expenses, don’t overlook expenditures incurred in caring for your children, parents, and any other dependents for whom you provide more than half (more than 10 percent if they qualify under a multiple-support agreement) of the total support for the year in question. The IRS allows you to take advantage of this break even if you’re disqualified from claiming an exemption for, say, your father, because his reportable income exceeds the ceiling on the income that a dependent can receive. The income cap is indexed for inflation. For 2015, it is $4,000, up slightly from $3,950 for 2014.

Different rules apply if you’re divorced or legally separated. At one time, a divorced or separated parent could deduct payments for a child's medical expenses only if that parent could claim an exemption for the child. Now, however, it no longer matters whether the exemption belongs to you or your ex-spouse.

About the author:
Julian Block writes and practices law in Larchmont, New York, and was formerly with the IRS as a special agent (criminal investigator) and an attorney. More on this topic is available from “Julian Block’s Year Round Tax Strategies,” available at julianblocktaxexpert.com.

Related article:

How to Get the Most from Medical Deductions

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