Lodging And Medical Travel: What Expenses Are Covered?

Lodging expenses for medical travel are allowed for deduction under certain conditions. The lodging must be primarily for and essential to medical care, and the medical care must be provided by a licensed physician in a hospital or a facility equivalent to a licensed hospital. The lodging must not be extravagant under the circumstances, and there must be no significant element of personal pleasure, recreation, or vacation in the travel away from home. The allowable deduction for lodging expenses is limited to $50 per night per person, and meals are not included in the deduction. It is important to note that these conditions must be met for the lodging expenses to qualify as a medical expense deduction.

Lodging must be essential to medical care

For lodging to be considered essential to medical care, it must meet the following conditions:

• The lodging is primarily for and essential to medical care.
• The medical care is provided by a doctor in a licensed hospital or in a medical care facility that is the equivalent of a licensed hospital.
• The lodging is not lavish or extravagant under the circumstances.
• There is no significant element of personal pleasure, recreation, or vacation in the travel away from home.

The amount allowable as a medical expense for lodging cannot exceed $50 per night per person for up to two people (i.e., the patient and a caregiver). For example, if a medical tourist travels to Israel to receive open-heart surgery at the recommendation of his physician, he may deduct up to $100 per night for lodging for himself and a required caregiver.

To deduct the lodging expenses of a caregiver, the taxpayer must actually pay those expenses; if the caregiver pays for her own expenses out of pocket, she may deduct her portion of the allowable lodging of $50 per night only if the person she is traveling with is her spouse or dependent.

A taxpayer may not, however, deduct the cost of meals as a medical expense unless he is being treated in a hospital or an equivalent licensed facility.

Medical care must be provided by a licensed hospital or equivalent

The Internal Revenue Code generally prohibits the deduction of personal or living expenses unless specifically allowed by the Code. Section 213 of the Internal Revenue Code allows a deduction for expenses paid for medical care. This includes the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, as well as transportation primarily for and essential to medical care.

To be eligible for a deduction, medical care must be provided by a physician in a licensed hospital or a medical care facility equivalent to a licensed hospital. The care must be essential to the patient's health and there must be no significant element of personal pleasure, recreation, or vacation in the travel.

The deduction is limited to $50 per person for each night of lodging while receiving medical care. This covers the patient and one caregiver, such as a parent or nurse, travelling with them. The cost of meals is not included in this deduction.

It is important to note that medical expenses are only deductible if they exceed 7.5% of the individual's adjusted gross income. Additionally, only itemized deductions are eligible, and certain procedures like cosmetic surgery are excluded unless necessary to treat a deformity or disease.

When seeking medical treatment, it is important to keep detailed records and obtain a doctor's written statement justifying the medical purpose of the trip and the necessity of a travel companion, if applicable.

Lodging must not be lavish or extravagant

The IRS has specific criteria for lodging expenses to be tax-deductible. While the IRS does not set a standard amount that can be deducted for lodging expenses, the site selection for local lodging can affect its standing as a deduction. The lodging must not be lavish or extravagant and must not offer recreational benefits to the individual. The criteria for tax-deductible lodging expenses are part of the safe harbor rules for local lodging.

The safe harbor rules for local lodging state that the lodging must be necessary for the individual to fully participate in or be available for business activities such as meetings, conferences, or training. The lodging must also be for no more than five calendar days and must not recur more than once per calendar quarter. Additionally, the employer must require the employee to remain at the lodging overnight.

The facts and circumstances test can also be applied instead of the safe harbor rules. Under this test, the lodging expense must be incurred due to a bona fide condition of employment imposed by the employer and must serve a business purpose rather than providing personal benefits to the employee. The lodging must also not be considered lavish or extravagant and must not provide significant personal pleasure or recreation.

Examples of local lodging that do not satisfy the facts and circumstances test include providing an employee with a weekend at a luxury hotel or resort, or covering local lodging expenses to enable an employee to avoid a long-distance commute. It is important to note that lodging expenses for medical travel are eligible for reimbursement through a flexible spending account (FSA), health savings account (HSA), or health reimbursement arrangement (HRA). However, these reimbursements are limited to $50 per night per person and do not include meals.

Travel must not be for personal pleasure, recreation, or vacation

When it comes to lodging and travel expenses for medical purposes, there are specific criteria that must be met for these costs to be deductible. The criteria are outlined in Internal Revenue Code Section 213 and IRS Publication 502. Here are the key points to remember:

• The lodging must be primarily for and essential to medical care. It should not be for personal pleasure, recreation, or vacation. This means that the main purpose of your travel must be to receive medical treatment, and any vacation or recreational activities cannot be a significant part of the trip.
• The medical care must be provided by a licensed physician in a hospital or a facility equivalent to a licensed hospital. This ensures that the treatment you are receiving is legitimate and necessary.
• The lodging expenses should be reasonable and not lavish or extravagant under the circumstances. This means that the cost of lodging should be appropriate for the location and the nature of the medical treatment.
• The deduction for lodging expenses is limited. You can deduct up to $50 per person per night for lodging while receiving medical care. If a caregiver or parent is travelling with the patient, you can include their lodging expenses as well, up to a total of $100 per night. Meals are not included in this deduction.
• To claim these deductions, it is important to maintain proper documentation. This includes keeping records of all related expenses, such as transportation costs, lodging receipts, and medical bills. Additionally, it is recommended to obtain a written statement from your doctor confirming the medical purpose of your trip and the necessity of a travel companion, if applicable.
• When filing your taxes, you will need to itemize your deductions. Medical expenses, including transportation and lodging, can be deducted on Schedule A of Form 1040. Remember that only the amount of your total medical expenses that exceeds 7.5% of your adjusted gross income is deductible.

Lodging is capped at $50 per night, per person

The cost of lodging while travelling for medical care is deductible, but there are some important conditions and limitations to be aware of.

Firstly, the lodging must be primarily for and essential to medical care. The medical care must be provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. The lodging must not be lavish or extravagant under the circumstances, and there must be no significant element of personal pleasure, recreation, or vacation in the travel away from home.

If these conditions are met, you can include the cost of lodging in your medical expenses, but the amount is capped at $50 per night, per person. This means that if a parent is travelling with a sick child, up to $100 per night can be included as a medical expense for lodging. It is important to note that meals are not included in this amount.

It is also worth noting that medical expenses are only deductible if you itemize deductions, and are only deductible in the year paid. If you do itemize, only the portion of your total medical expenses that exceed 7.5% of your adjusted gross income are deductible.

Frequently asked questions