You may see your pet as a member of the family, but the tax code doesn't treat it like one.
Caring for a pet can be expensive, especially when the animal has a medical condition that requires frequent visits to the veterinarian or costly medication. Unfortunately, you can't write off pet medical expenses on your taxes. However, tax law does allow deductions for veterinary care for certain working animals, including guide dogs.
Policy
Taxpayers who itemize their deductions are allowed to deduct medical and dental expenses above a certain amount. IRS Publication 502 lists dozens of health-related items, services and procedures and identifies whether they qualify as medical expenses eligible for the deduction. Only medical care for yourself, your spouse and the dependents you claim on your tax return is eligible. The publication says veterinary fees "generally" cannot be included in medical expenses.
Exception
Though the IRS doesn't allow deductions for companion animals, it makes an exception for working animals. If you have a medical condition that requires you to use a service animal -- such as a guide dog if you are blind -- then you can include in your medical expenses the cost of caring for that animal. This is because the animal is considered part of your own medical treatment. You can include all costs related to it -- not just veterinary bills, but also the costs of acquiring, training and maintaining the animal.
Limit
Even if the cost of care and maintenance for your service animal qualifies as a medical expense for tax purposes, the amount you can actually deduct is limited. The deduction for medical and dental expenses applies only to total costs greater than 7.5 percent of your adjusted gross income. For example, if your adjusted gross income is $50,000, then 7.5 percent would be $3,750. If you had a total of $3,000 in medical and dental expenses, including care for a service animal, then you could not take a deduction. But if the total were $5,000, then you could take a deduction of $1,250.
Businesses
Business owners can write off medical expenses for working animals that are integral to their business. Entrepreneur magazine cites the example of a guard dog that protects a business's property. A company that raises dogs and trains them to be services animals may also be able to deduct veterinary bills. But these costs would be deducted as business expenses rather than medical expenses.
Legislation
In 2009, Republican congressman Thaddeus McCotter of Michigan proposed legislation to allow taxpayers to deduct up to $3,500 a year for pet-care expenses, including medical bills. McCotter named his bill the "Humanity and Pets Partnered Through the Years Act" -- or, the "HAPPY Act." The bill was referred to the House Ways and Means Committee, which never acted on it.
Tags: medical expenses, dental expenses, medical dental, medical dental expenses, service animal, working animals, adjusted gross