Some companies are misrepresenting when food and wellness expenses can be paid or reimbursed under flexible spending accounts and other health spending plans, the IRS is warning, stressing that personal expenses for general health and wellness are not considered medical expenses under tax law.
This means personal expenses are not deductible or reimbursable under health flexible spending arrangements, health savings accounts, health reimbursement arrangements or medical savings accounts (
“Taxpayers should be careful to follow the rules amid some aggressive marketing that suggests personal expenditures on things like food for weight loss qualify for reimbursement when they don’t qualify as medical expenses,” said IRS Commissioner Danny Werfel.
Some companies mistakenly claim that notes from doctors based merely on self-reported health information can convert non-medical food, wellness and exercise expenses into medical expenses, but this documentation actually doesn’t.
Such a note doesn’t establish that an otherwise personal expense satisfies the requirement that it be related to a targeted diagnosis-specific activity or treatment; these types of personal expenses do not qualify as medical expenses, the IRS said.
FSAs and other health spending plans that pay for, or reimburse, non-medical expenses are not qualified plans, the agency added. If the plan is not qualified, all payments made to taxpayers under the plan, even reimbursements for actual medical expenses, are includible in income.
Taxpayers with questions should review the
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