Gluten-Free Federal Tax Deduction
Are you eligible to deduct the excess costs of a gluten-free diet?
1. To be eligible, you must have a documented reason to require the observance of a gluten-free diet, along with a physician's prescription to follow a gluten-free diet will provide sufficient documentation of eligibility.
2. The excess cost of gluten-free food can be deducted if the taxpayer can deduct expenses paid for medical care of the taxpayer, spouse, or dependent, to the extent the expenses exceed 10 percent of adjusted gross income. (See full letter below)
If you meet both of these criteria and choose to itemize deductions consult with your tax advisor. Start collecting receipts and record them regularly. Download a spreadsheet for calculating the deductible expense. For a more detailed description of the process consult Lifeline 2011 Volume XXXI No. 4.
Thanks to CSA member efforts, the IRS determined that those who must adhere to a strict non-gluten diet may write off the higher expenses of their diet, no questions asked. IRS response to CSA's request to relieve the financial stress on our members was favorable. This is part of CSA's ongoing process to meet the needs of CSA members and others under financial strain because of the higher costs of living gluten-free.
March 24, 2011 Letter Ruling DEPARTMENT OF THE TREASURY Download a copy of the letter
INTERNAL REVENUE SERVICE (abridged version)
I am responding to your inquiry to Commissioner Douglas H. Shulman dated February 25, 2011. You requested that we revise published guidance to taxpayers clarifying the tax treatment of special foods purchased to treat celiac disease.
Taxpayers can deduct expenses paid for medical care of the taxpayer, spouse, or dependent, to the extent the expenses exceed 7.5 percent of adjusted gross income. Section 213(a) of the Internal Revenue Code. Medical care refers to amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or function of the body. Section 213(d)(1)(A).
Therefore, if a taxpayer can establish the medical purpose of the diet, such as through a physician's diagnosis, then to the extent the cost of the food for the special diet exceeds the cost of the food that satisfies a taxpayer's normal nutritional needs if the special diet were not required, the excess cost is an expense for medical care under section 213(d).
We will consider modifying the language of Publication 502, Medical and Dental Expenses, to reflect these considerations.
Thomas D. Moffitt
Chief, Branch 2
Office of Associate Chief Counsel
(Income Tax & Accounting)