Is Addiction Treatment Tax Deductible?

In specific situations, treatment services received in an addiction recovery center or therapy may be tax deductible.

When medical expenses exceed a specific percentage of your income, for example, you may be able to write off addiction treatment services.

Qualifying Addiction Treatment Expenses

Addiction treatment can be tax deductible in the United States under certain conditions. To qualify, addiction treatment costs must be considered “qualified medical expenses.”

Examples of qualified medical expenses include:

• inpatient or outpatient treatment
• doctor visits
• therapy sessions
• prescription medications

Addiction treatment expenses can be claimed as medical deductions on your federal income tax return if you itemize your deductions.

However, only medical expenses that exceed a certain percentage of your adjusted gross income (AGI) are deductible.

The threshold for most taxpayers is 7.5% of AGI for tax years 2021 and 2022. It will return to 10% of AGI in 2023 for most taxpayers.

Documenting And Claiming Deductions

It’s crucial to maintain detailed records of all expenses related to addiction treatment, including receipts and invoices for services.

These documents will be essential when claiming deductions and may be subject to verification by the IRS.

When filing your taxes, itemize your deductions and use Schedule A to report eligible medical expenses. If these expenses exceed the allotted threshold of your AGI, they can be deducted.

Consulting Tax Professionals For Guidance

Consulting tax professionals is always recommended when seeking to write off addiction treatment expenses.

Tax codes are complex, and their interpretation can vary. They also tend to change every few years, so tax professionals can keep you up-to-date.

Experienced tax advisors can help you understand eligibility, maximize deductions, and ensure compliance with current tax laws.

They’ll guide you through the process of itemizing medical expenses, assist in calculating the threshold, and provide expertise on specific deductions related to addiction treatment.

Their assistance not only ensures you take full advantage of available deductions but also minimizes the risk of errors or audits by tax authorities.

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Written by the Addiction Resource Editorial Staff