Medical alert systems, also called personal emergency response systems (PERS), can significantly lower the cost of care, inhibit Alzheimer's wandering, improve the quality of life for seniors who either live independently or spend a great deal of time alone, and offer peace of mind to your family or caregivers. Medical alert systems are one of the most innovative and encouraging aging-in-place technologies. But, the question remains, are medical alert systems tax deductible? Keep reading to find out.
What are medical expenses?
According to the Internal Revenue Service (IRS), medical expenses are those medical costs— including equipment, supplies, and diagnostic devices— incurred due to the diagnosis, cure, treatment, or prevention of disease affecting any body part or function. These medical expenses should be used to ease or avoid a physical or mental disability or illness.
For seniors, medical expense deductions can lessen the financial responsibility of federal income taxes.
What are medical expense deductions?
For seniors, medical expense deductions can lessen the financial responsibility of federal income taxes, so understanding which expenditures the IRS permits as deductions are essential when preparing a senior’s tax return. Some available medical expense deductions include:
- Out-of-pocket costs for prescription medications, healthcare, and health insurance premiums.
- Medical equipment prescribed by a doctor to treat an illness, disease, disorder, or disability.
- Medical expenses like hearing aids, blood sugar testing supplies, and ambulance services.
- Certain home modifications—like widening doorways or installing grip bars.
Medical alert system tax deductions
The IRS’s guidelines regarding tax deductions for medical expenses are forthright, as stated above. However, the answer regarding medical alert devices isn’t as straightforward.
While the IRS guidelines don’t explicitly list medical alert devices, they do contain several medical alert system-associated qualifying expenses including the installation of specialized equipment for therapeutic purposes. Additionally, the IRS states: “You can include in 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.”
Since urgent response services typically maintain a copy of your supplied medical history on file, this information can be provided to a medical response team, dispatched ambulance, and even your physician in an emergency. Under this exemption, it may be possible to claim this medical expense on your taxes.
Alternative ways to deduct a medical alert system
A health savings account (HSA) or a health reimbursement arrangement (HRA) are two alternatives to save money to pay for qualifying medical expenses that are not covered by insurance or otherwise tax deductible.
You can use your HSA or HRA funds to pay for the cost of qualified medical expenses, including many medical alert systems, without federal tax liability or penalty. A tax deduction can be claimed for any contributions you, or anyone (excluding your employer) makes toward your HSA or HRA. Speak to your provider to see if your system qualifies.
Remember that tax laws change frequently, so it’s important to speak with your tax professional to discover what you’re qualified to claim. Maintain any receipts and statements from out-of-pocket, HSA, or HRA purchases for your tax professional or IRS inquiries about specific expenses.