On March 29, 2019, the IRS released Information Letter 2019-0005, which responded to an inquiry about whether menstrual care products may be categorized as qualified medical expenses under Code Section 213 and expensed under health savings accounts (HSAs), flexible spending accounts (FSAs), and other tax-preferred accounts.
As background, Code Section 213 allows taxpayers to deduct medical care expenses when made for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of a structure or function of the body.” Alternatively, personal, family or living expenses that are merely beneficial to the general health of the individual likely do not qualify as “medical care” under 213. However, personal expenses can be considered “medical care” if the taxpayer would not have incurred the expense but for the disease or illness.
The IRS does not say whether menstrual care products can be “medical care,” but provides a list of objective factors to use when determining whether an expense that is typically personal in nature was, in a specific instance, a qualified medical expense. The factors include:
- The motive or purpose for making the expenditure
- A physician’s diagnosis of a medical condition and recommendation of the item as treatment or mitigation
- The relationship between the treatment and the illness
- The treatment’s effectiveness
- The proximity in time to the onset or recurrence of a disease
Applying these objective factors to menstrual products, some things to consider are whether the menstrual products are purchased for treating, mitigating, or diagnosing the taxpayer’s disease; whether the costs are merely beneficial to the taxpayer’s general health such that they might be considered the taxpayer’s personal expense; and whether the expense would be incurred but for the medical condition.
Please note that this letter is intended only for informational purposes, but serves as a good reminder that HSA, FSA, and other tax-preferred accounts can only be used for certain expenses. Administrators must consider when approving an expense as qualified under Code Section 213 whether it would typically be personal in nature. If you have additional questions regarding Code Section 213, please contact your adviser.
Information Letter 2019-0005 »