On April 2, 2002, the IRS announced a new policy (IRS Ruling 202-19) stating that "Obesity is medically accepted to be a disease in its own right." For taxpayers, this means that treatment specifically for obesity can now be claimed as a medical deduction. According to the IRS:
"Uncompensated amounts paid by individuals for participation in a weight-loss program as treatment for a specific disease or diseases (including obesity) diagnosed by a physician are expenses for medical care that are deductible under § 213, subject to the limitations of that section."
Read the IRS Ruling 2002-19.
This ruling is a major victory for several reasons. First, it will greatly help individuals who have high expenses related to their obesity, who itemize their deductions, and who are eligible for the medical deduction. Second, the ruling applies to individuals who can participate in a flexible savings account because those programs use the same IRS rules. This means that many persons can put aside pre-tax dollars to use for weight management during the year.
Finally, by recognizing obesity as an disease in its own right, the ruling will encourage Medicare, Medicaid and private insurance programs, including managed care, to look at including obesity treatments in their coverages.
How did this change come about?
In September 1999, the American Obesity Treatment Association and nine organizations petitioned the Internal Revenue Service (IRS) to change its policy to allow a tax deduction for weight loss treatments.
The nine organizations are:
American Association of Bariatric Physicians, American Society for Bariatric Surgery, Health Management Resources, Inc, Jenny Craig, Inc., Knoll Pharmaceutical Co., Novartis Nutrition Corp., Obesity Law and Advocacy Center, Shape Up! America, Tanita Corp., and Weight Watchers Intl. Inc.
In March, 2000, on the request of the IRS, we submitted extensive evidence that obesity is a disease. As a result, the IRS dramatically revised its policy to allow taxpayers (on year 200 tax returns) to: "include the cost of a weight-loss program undertaken at a physician's direction to treat an existing disease (such as heart disease)."
In May 2001, we wrote to the IRS asking for clarification on whether the cost for the treatment of obesity itself, without another disease, is allowed as a medical expense.
The IRS responded to the AOTA, in June 2008, stating that "If obesity is a disease, then expenses for the diagnosis and treatment of obesity may qualify as expenses for medical care."
Read the IRS Clarification of Obesity Tax Deduction Ruling (June 2001).
For more information about tax procedures and other rulings related to obesity,
go to the IRS website.