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Taxpayer Information
Taxpayer’s Guide on IRS Policy
On April 2, 2002, the Internal Revenue Service (IRS) announced a
change in its policy regarding how taxpayers may deduct the
costs of weight loss / weight control programs.
The following are interpretations of the American Obesity
Association regarding the IRS policy. We want to emphasize that
this is our interpretation; not an official interpretation.
Consult your professional tax advisor on how this new policy
effects your specific tax situation.
What has changed?
The IRS set out a new policy in a Revenue Ruling (2002-19) on
April 2, 2002.
In Revenue Ruling 2002-19, the IRS stated that,
"Obesity is medically accepted to be a disease in its own
right." The IRS ruled that, "Uncompensated amounts paid by
individuals for participation in a weight-loss program as
treatment for a specific disease or diseases (including obesity)
diagnosed by a physician are expenses for medical care that are
deductible under § 213, subject to the limitations of that
section."
What does the policy change mean?
Previously, the language was so strict that all treatments
for weight loss were excluded. The IRS then allowed the cost for
treating diseases associated with obesity. Now the IRS has
clearly stated new criteria allowing a wide array of costs for
weight loss programs to be deducted by taxpayers to a) treat
obesity, and b) treat conditions (such as hypertension) that can
be improved with weight loss.
Who is eligible for the deduction?
There are three categories of persons who may be eligible.
First taxpayers who itemize their deductions can add these
costs to the costs of medical and dental expenses. Within this
category, taxpayers can only deduct medical and dental expenses
that exceed 7.5% of their adjusted gross income and that are not
reimbursed.
Second many employees have medical savings accounts (MSAs)
through their employers. MSAs use the same definitions of
medical expenses, as do individual taxpayers. Therefore,
employees can use their MSAs for weight loss programs if
undertaken at a physician’s direction to treat an existing
disease.
Third many employers provide Flexible Savings Accounts (FSAs)
that may provide this coverage. FSAs, also, use the same
definitions of medical expenses, as do individual taxpayers.
Do I have to be overweight or obese to be eligible for
the deduction?
The IRS did not use those terms. The eligible taxpayer must have
a disease (including obesity), which is likely to benefit from
weight loss treatment. Heart disease, hypertension, high
cholesterol, type 2 diabetes are other conditions that a
physician may prescribe weight loss for treatment even if the
person is not obese.
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Is obesity itself a disease?
Yes. Obesity is a listed disease in the International
Classification of Diseases (ICD-9-CM). The ICD-9-CM is published
by the World Health Organization and is the definitive
compilation of diseases; the United States Public Health Service
uses it.
According to the IRS, "Obesity is medically accepted to be a
disease in its own right. The National Heart, Lung, and Blood
Institute, part of the National Institutes of Health, describes
obesity as a ’complex, multifactorial chronic disease.’" "Other
government and scientific entities have reached similar
conclusions. For example, in a preamble to final regulations the
Food and Drug Administration states "obesity is a disease." 65
Fed. Reg. 1027, 1028 (Jan. 6, 2000). The World Health
Organization states that "[o]obesity is now well recognized as a
disease in its own right ...." Press Release 46 (June 12,
1997)."
Obesity is not defined in the Revenue Ruling. Medically, obesity
is excessive body fat usually measured as 30 pounds or more over
ideal body weight or a Body Mass Index of 30
or more.
What is the definition of a "weight-loss program?"
The AOA interprets "weight-loss programs" to include
physician-recommended treatments that are specific for weight
loss and maintenance such as bariatric surgery, FDA approved
weight loss drugs, physician and hospital-based programs,
behavioral counseling, the services of physicians, dieticians
and nutritionists, exercise specialists as well as some
commercial-like programs such as Weight Watchers and Jenny
Craig.
What about weight maintenance programs?
Weight maintenance is a special circumstance and may or may not
be allowed as a deduction. According to the IRS, once a
condition is "cured," it is no longer deductible. However, the
IRS states that "the deduction for medical care expenses will be
confined strictly to expenses incurred primarily for the
prevention or alleviation of a physical or mental defect or
illness." Maintaining a weight loss should qualify for the
deduction if a physician recommends the continuation of
treatment to manage weight for prevention or alleviation
purposes.
What expenses cannot be deducted?
Under separate sections of Publication 502, the following
expenses are not deductible: health club dues, nutritional
supplements, over the counter products, low fat foods, exercise
equipment. Liposuction is regarded as cosmetic surgery and would
not be deductible under this new provision. The IRS has ruled
that "a taxpayer who participates in a weight reduction program
to improve the taxpayer’s appearance, general health, and sense
of well-being, and not to cure a specific ailment or disease,
may not deduct the cost as a medical expense."
What documentation and proof of payment must be submitted to the
IRS?
Documentation that your physician told you to lose weight to
treat a specific disease such as obesity should be kept.
Although the weight loss program itself does not have to be
under physician direction, documentation should describe the
treatment your physician recommends for weight loss. It is
probably prudent to make a note for your files of when your
doctor told you to lose weight. You must also keep records of
the expense of the treatment(s). You need not submit proof of
treatment and payment for treatment (e.g., prescriptions,
receipts, invoices) with your taxes. However, such documentation
should be kept in case of an audit.
YOU CAN FEEL GOOD AND BE PROUD
OF
YOUR APPEARANCE AS NEVER
BEFORE!
Join the thousands who have
found freedom from fat and
who are now
enjoying life to it's maximum potential
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