Private ruling: Medical expenses tax offset
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a medical expenses tax offset for the costs associated with IVF, egg and sperm donation? | A1: Yes.

Relevant facts and circumstances: Due to your infertility you have paid for the costs of obtaining donor eggs and sperm. You will have the resulting embryos transferred to yourself in a procedure performed by your fertility specialist as part of your IVF treatment. Your expenses were paid by you and were incurred on your behalf.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $2060 for the 2012-13 income year. Medical expenses are defined in paragraph 159P(4)(a) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital in respect of an illness or operation. Taxation Ruling IT 2359 states that infertility is an illness within the ordinary meaning of the term and payments to a legally qualified medical practitioner or hospital for treatment under an IVF program qualify as medical expenses. In your case, you incurred expenses related to egg and sperm donation as part of your IVF treatment. The cost of obtaining the donor eggs and sperm as part of IVF is considered to be a cost of the treatment to overcome infertility. Therefore, you are entitled to include these expenses as a medical expense for the purpose of calculating a medical expenses tax offset.