[IEP_guide] IRS Letter: Tuition Can Be a Medical Expense

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IRS Letter: Tuition Can Be a Medical Expense

Washington (Feb. 5, 2007) - Tuition paid for a school focused on

treating learning disabilities can be classified as a medical

expense, according to a private letter ruling from the Internal

Revenue Service.

Like other deductible medical expenses, the letter said that the cost

is deductible only to the extent that medical expenses for the year

cumulatively exceed 7.5 percent of a taxpayer's adjusted gross income.

According to a previous revenue ruling, the distinguishing

characteristic of a special school is the " substantive content of its

curriculum. " Meaning that while a school can provide ordinary

education, that education must be incidental to the school's primary

purpose of enabling students to overcome a handicap.

Under that definition, a school can be " special " for one student but

not for another, though the letter makes a point of noting that

normal education is not medical care because it is not designed to

help someone overcome a medical disability.

In the scenario addressed in the letter, two of a taxpayer's children

were diagnosed as having disabilities caused by medical conditions,

including dyslexia, which handicapped their ability to learn. Both

children were sent to a school " with a program of special education

designed to enable the child to deal with the medical handicaps and

move on to study at a regular school. "

Under the tax code, the taxpayer can deduct expenses paid during the

taxable year for medical care within the limits of Section 213.

Medical care includes 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.

The two main conditions outlined in the letter are that:

A physician, or other qualified professional, must diagnose a medical

condition requiring special education to correct the condition for

that education to be medical care; and,

The school need not employ physicians to provide that special

education, but must have professional staff competent to design and

supervise a curriculum providing medical care.

Among the special education methods singled out in the letter are

teaching Braille to a visually-impaired person, teaching lip reading

to a hearing-impaired person, or giving remedial language training to

correct a condition caused by a birth defect. The IRS said that

dyslexia could be sufficiently severe as to be such a handicap.

— WebCPA staff