As a caregiver or family member, you may well be wondering whether the medical alert system that your beloved family member has is tax deductible. The answer isn’t an easy one. The Internal Revenue Service’s guidelines are pretty clear, stating that ambulance services, hearing aids, blood sugar testing supplies, acupuncture, and even special home modifications are all tax deductible.
However, they didn’t catch up on the popularity of medical alert systems, since those are yet to be listed specifically. However, it’s stated that you can include “medical expenses amounts paid to a plan that keeps medical information in a computer data bank and retrieves and furnishes the information upon request to an attending physician”. And as you see, this is exactly what the monitoring team does: they keep medical history on file via the vial of life feature, and provide it to a medical response team or a dispatched ambulance.
Don’t forget that this is a gray area, however, and you should definitely consult with your provider over this matter. The laws can also change, so we recommend contacting your local tax officer about it or reading up on the subject matter first.
How to claim a deduction for medical alert systems
Even though the money spent on a medical alert system can easily be included in the medical expenses section on tax returns – especially if the right tools are used – there are certain restrictions to pay attention to. For starters, not only is it required to itemize deductions, but the total of your expected reimbursement of medical expenses has to exceed 10% of your adjusted gross income (AGI) too. And that still doesn’t result in the final deductible amount; you also need to subtract 10% of your AGI from the total of medical expenses to get the true amount that can be claimed as a medical expense deduction.
Simply put, if the annual costs of a medical alert system increase medical expenses above the 10% AGI threshold and the itemized deductions result in fewer taxes than sticking to standard deductions, then this expense could and should be included on the tax return.