The IRS has released updated versions of Publications 502 and 503 for the 2022 tax year. Publication 502 describes the medical expenses that are deductible by taxpayers on their 2022 federal income tax returns. Publication 503 explains the requirements that taxpayers must meet to claim the dependent care tax credit (DCTC) for child and dependent care expenses.
The 2022 version of Publication 502 is substantially similar to its 2021 counterpart. Reflecting prior guidance, personal protective equipment (e.g., masks, hand sanitizer, and hand sanitizing wipes) for the primary purpose of preventing the spread of COVID-19 is now included in the list of medical expenses. Clarifications have been added regarding expenses to treat excessive use of alcohol and drugs, and relevant dollar amounts (e.g., the standard mileage rate for use of an automobile to obtain medical care) have been revised to reflect their 2022 inflation-adjusted values. Publication 502 has also been revised to reflect that the health coverage tax credit (HCTC) is not available after 2021. Publication 503 has been revised to note that most of the temporary changes to the DCTC and DCAP rules that were provided as COVID-related relief are no longer available, and to delete references to those changes. It also references prior guidance under which DCAPs could be amended to allow unused amounts from 2021 to carry over to 2022.
Source: Thomson Reuters
Last month’s U.S. Supreme Court ruling, which overturned the constitutional right to abortion (Roe v. Wade), has left thousands of women across the country unsure of where to find appropriate care and abortion expenses.
Below is an overview of the recent changes to employee benefits in lieu of the ruling. For a full explanation, please read our latest handout.
Medical care expenses for individuals plus increased mileage rate
For individuals who seek medical treatment in a city or a location hundreds of miles away, there are expenses they can use for transportation, meals, and lodging. All expenses obtained for this service, though, must be primarily for and essential to medical care.
It’s important to note the mileage rate for traveling to obtain medical care also. At the start of every year, the IRS announces the standard mileage rate for this type of service. The standard rate was 18 cents per mile from January 1, 2022, through June 30, 2022. However, due to increased gas prices, the rate rose to 22 cents per mile from now until the duration of the calendar year.
What qualifies as expenses involving transportation to and from medical treatment sites?
Individuals may only benefit from transportation costs obtained to and from medical treatment sites when it’s via taxis, buses, trains, airplanes, rental cars, and rideshare services (such as Uber or Lyft). In addition, transportation to a medical treatment site only qualifies if it’s to treat a specific ailment or disease.
Qualifications for meal and lodging expenses
The only way meal expenses count as expenses for medical care is if they are provided at a hospital or a similar institution where an individual is receiving care. Therefore, meal expenses away from home while an individual seeks treatment is not eligible.
Lodging expenses can be reimbursable as well, however it must meet 1 of these 3 requirements.
- If incurred primarily for and essential to medical care
- If the medical care is provided by a physician in a licensed hospital (or in a medical care facility related to one)
- If there is no significant element of personal pleasure, recreation, or vacation
Lodging expenses can be reimbursed at a maximum amount of $50 per day per individual.
Travel costs associated with abortion care
With the need to travel for abortion services on the rise, many companies have installed abortion travel benefits to their benefit package to help with travel costs. The expenses for abortion travel benefits cover ground transportation (bus, taxi, train), airfare and lodging (individual or two people).