Kathryn Bruns, CPA
DNA testing deductible for tax purposes ?
Hello ! I have been out of commission a bit due to moving, but I'm back ! (primarily because my back is telling me I NEED to stop the craziness). I have tons of news reading to catch up on and share, but this particular piece caught my eye because I have (for fun) done DNA tests for me and for my dog (primarily to see ancestry).
As discussed in the following piece, the part of a DNA test that is for medical diagnostic purposes may be deducted; however, the portion related to seeing your unique mix of heritage is not. If you are actually itemizing deductions on Schedule A and benefiting from deductions for medical expenses, AND have these types of costs, let me know if you need help nitpicking at the deductible portion !
FROM THE IRS:
Ltr. Rul. 201933005, August 16, 2019
The taxpayer requested a ruling on whether or not the cost of certain genetic testing services and their resulting reports are considered deductible medical expenses under IRC section 213(d).
The taxpayer has a healthcare flexible spending account (FSA) and seeks to use the FSA to purchase genetic testing services. The cost of the service includes a DNA collection kit plus a report on the results of the DNA testing. The report provides the taxpayer with a deeper understanding of his or her health risks, and encourages the taxpayer to share the information with a healthcare provider for additional testing, diagnosis, or treatment. The taxpayer did not seek a ruling on whether the cost of the report relating to ancestry is a medical expense.
In general, an expense that is merely beneficial to the general health of an individual is personal and is not for medical care. For example, education on how to improve one's general health, such as through diet and exercise, is not medical care. Diagnostic services, however, may be considered medical care.
Revenue Ruling 2007-72 states that the term diagnosis encompasses the determination that a disease may or may not be present, and includes testing of changes to the function of the body that are unrelated to disease. Amounts paid for diagnostic and similar procedures and devices qualify as medical care, even if such diagnostic procedure is performed without a physician's recommendation. An example of this is a pregnancy test.
The DNA testing in this case includes genotyping which is considered a diagnostic medical procedure, and information on the taxpayer's ancestry, which is not medical care. Therefore, the taxpayer must allocate the price paid for the DNA collection kit and health services between the medical and non-medical items and services to determine the portion of the cost that qualifies as medical care under IRC section 213(d).