The IRS has no heart – until they do! Tax Breaks for Nursing Mothers & Women’s Health
Dear Clients & Friends of the Firm:
There’s a joke in the movie, Men in Black; the punchline is:
No, ma’am. We at the FBI do not have a sense of humor we’re aware of. May we come in?
The IRS, likewise, has no sense of humor or heart; all they have is the Statute, The Code! For the IRS, good, bad, ethical and unethical is defined by the Internal Revenue Code. If it’s not in the Code, then, to the IRS, it is not relevant.
The IRS has no sense of humor whatsoever.
On occasion, however, the Code will allow the IRS to do something that is really good – like give a tax break to breastfeeding mothers.
Nursing mothers are getting a new tax break from the IRS– which puts breast pumps and other supplies on the list of tax-deductible items. (IRS Ann. 2011-14, 2011-9 IRB).
Breastfeeding women can spend as much as $1,000 each year on nursing supplies, thanks to pressure from the American Academy of Pediatrics and other advocates that pushed to define breast pumps and other supplies as medical devices.
The reason for the IRS’s change of heart is the many long-lasting health benefits of breast milk for mothers and their babies.
The IRS announcement read:
“The Internal Revenue Service has concluded that breast pumps and supplies that assist lactation are medical care under 213(d) of the Internal Revenue Code because, like obstetric care, they are for the purpose of affecting a structure or function of the body of the lactating woman.”
It’s about much more than breastfeeding
Obviously this is good news. Actually this news is better than you think because it represents a major shift in tax law on the topics of wellness and women’s health maintenance. It’s about much more than breastfeeding though breastfeeding was a major driving force in this new focus on women’s health.
The list of items that now have tax benefits are:
- Breastfeeding support, supplies, and counseling.
- Contraceptive methods and counseling, as detailed below (also known as the contraceptive mandate, see text beginning at footnote 28).
- Annual screening and counseling for interpersonal and domestic violence.
- A recommended screening and counseling for interpersonal and domestic violence may consist of a few, brief, open-ended questions, and can be facilitated by the use of brochures, forms, or other assessment tools including chart prompts.
- Gestational diabetes screening, in pregnant women between 24 and 28 weeks of gestation and at the first prenatal visit for pregnant women identified to be at high risk for diabetes.
- Human high-risk papillomavirus DNA testing in women with normal cytology results; screening should begin at 30 years of age and should occur no more frequently than every three years.
- Annual counseling and screening for human immune-deficiency virus (HIV) for all sexually active women. For these purposes, “screening” means actual testing for HIV.
- Annual counseling for sexually transmitted infections for all sexually active women.
- Well-woman visits, annually, unless several visits may be needed to obtain all necessary recommended preventive services, depending on a woman’s health status, health needs, and other risk factors.
The new guidelines do not promote multiple visits for separate services but nothing in the Regs requires that each service be provided in a separate visit.
This is Good News; but it’s not that good.
This is obviously good news and long-overdue; but the news is not that good. These are treated as itemized medical deductions subject to the 10% of AGI limitation. In effect, for most families, this deduction will be lost in the labyrinth of IRS Forms.
This News is actually better than you think.
The best way to fully realize the tax benefits of women’s wellness law in the Tax Code is to use an employer’s FSA; and FSA is a “Flexible Spending Account” offered by many employers. The new restrictions created by the Affordable Care Act will cause a substantial future increase in FSA accounts.
I may write a future new letter on FSA; do you think I should?
Sincerely
Steve Richardson, CPA