In September 1999, nine organizations including the American Society of Bariatric Physicians (links to www.asbp.org) and the American Society for Bariatric Surgery petitioned the Internal Revenue Service (IRS) to change its policy to allow a tax deduction for weight loss treatments.

IRS Policy to Deduct Weight Control Treatment

On April 2, 2002, the IRS announced a new policy (IRS Ruling 2002-19) 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.

"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."

A Big Victory!

This will greatly help individuals who have high expenses related to their obesity, who itemize their deductions, and who are eligible for the medical deduction.

• 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.
• By recognizing obesity as a 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 coverage.

Who is eligible for the weight loss deduction?

There are three categories of persons who may be eligible.

• First, taxpayers who itemize their deductions can add these costs to the costs of medical and dental expenses. Within this category, taxpayers can only deduct medical and dental expenses that exceed 7.5% of their adjusted gross income and that are not reimbursed.
• Second, many employees have medical savings accounts (MSAs) through their employers. MSAs use the same definitions of medical expenses, as do individual taxpayers. Therefore, employees can use their MSAs for weight loss programs if undertaken at a physician’s direction to treat an existing disease.
• Third, many employers provide Flexible Savings Accounts (FSAs) that may provide this coverage. FSAs, also, use the same definitions of medical expenses, as do individual taxpayers.

We recommend consulting your professional tax advisor before submitting a tax return.

For more information about tax procedures and other rulings related to obesity, go to the IRS website.

Download IRS Publication 502 - Medical and Dental Expenses

Do I have to be overweight or obese to be eligible for the deduction?

The IRS did not use those terms. The eligible taxpayer must have a disease (including obesity), which is likely to benefit from weight loss treatment. Heart disease, hypertension, high cholesterol, type 2 diabetes are other conditions that a physician may prescribe weight loss for treatment even if the person is not obese.

Is obesity itself a disease?

Yes. Obesity is a listed disease in the International Classification of Diseases (ICD-9-CM). The ICD-9-CM is published by the World Health Organization and is the definitive compilation of diseases; the United States Public Health Service uses it.

According to the IRS, "Obesity is medically accepted to be a disease in its own right. The National Heart, Lung, and Blood Institute, part of the National Institutes of Health, describes obesity as a ’complex, multifactorial chronic disease.’" "Other government and scientific entities have reached similar conclusions. For example, in a preamble to final regulations the Food and Drug Administration states "obesity is a disease." 65 Fed. Reg. 1027, 1028 (Jan. 6, 2000). The World Health Organization states that "[o]besity is now well recognized as a disease in its own right ...." Press Release 46 (June 12, 1997)."

Obesity is not defined in the IRS Ruling. Medically, obesity is excessive body fat usually measured as 30 pounds or more over ideal body weight or a Body Mass Index of 30 or more.

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