Can You Deduct IVF Expenses On Taxes? + FAQs

Yes, in vitro fertilization (IVF) expenses can be tax deductible in the United States under federal law – but there are important caveats.

At the federal level, IVF counts as a medical expense that you can deduct on your income taxes if you meet certain requirements (notably, itemizing deductions and exceeding the income threshold). State tax rules add another layer: some states simply follow the federal guidelines, while others have their own twists (a few even offer special credits or disallowances).

According to a 2022 American Society for Reproductive Medicine (ASRM) survey, 67% of infertility patients reported spending over $10,000 out-of-pocket on treatment. With IVF costs often reaching five figures per cycle, knowing the tax rules can make a big difference in affordability.

What will you learn in this article? 📚 Here’s a sneak peek (with some emoji flavor):

• 💡 Exactly when and how IVF costs are tax deductible – clear up the yes/no upfront, including the major IRS rule that could save you thousands.
• ⚠️ Common pitfalls to avoid – from double-dipping on deductions to trying to write off ineligible expenses like surrogacy fees.
• 🏷️ Real-world examples & scenarios – see how different families (and different states) handle IVF deductions, with numbers that illustrate the tax impact.
• 📜 What the IRS and courts have said – key evidence from IRS guidance and notable court cases that defined what counts (and what doesn’t) for IVF tax relief.
• 🗺️ Federal vs. state breakdown – discover how your state’s tax rules might help or hinder your IVF expense claims (including a handy table of state-specific nuances).
• 🔍 Crucial terms and players – decode jargon like AGI threshold and qualified medical expenses, and meet the entities (IRS, Tax Court, lawmakers, advocacy groups) shaping IVF tax policy.

Let’s dive in and demystify how U.S. tax law treats the costs of creating a family through IVF!

Yes, But With Conditions: Are IVF Expenses Tax Deductible?

Straight answer: Yes – IVF treatment is generally tax deductible as a medical expense on your federal income taxes. The IRS explicitly classifies fertility treatments like IVF (and related procedures) as “qualified medical expenses.” That means the cost of IVF – including doctor’s consultations, lab fees, embryo transfer procedures, fertility medications, egg retrievals, and even egg or sperm storage fees – can be counted toward your deductible medical expenses.

However, there’s a big asterisk. Under federal tax law, you can only deduct medical expenses if:

1. You itemize deductions on your tax return (forgoing the standard deduction), and
2. Your total unreimbursed medical expenses (IVF plus all other medical/dental costs) exceed 7.5% of your adjusted gross income (AGI) for the year.

In practice, this means IVF costs are only helpful at tax time if they are high relative to your income. For example, if your AGI is $100,000, only medical expenses beyond $7,500 (7.5% of AGI) are deductible. If you spent $20,000 on IVF and other healthcare, you could potentially write off $12,500 of it on Schedule A (after subtracting that first $7,500 floor). But if you spent “just” $5,000 on IVF, you wouldn’t clear the threshold at that income level – so none of it would yield a tax deduction.

Key point: IVF expenses are not a dollar-for-dollar tax credit; they reduce your taxable income as part of your medical itemized deductions. Therefore:

• If you normally take the standard deduction (and don’t itemize), IVF costs won’t save you anything on federal taxes unless they’re high enough that itemizing beats the standard deduction.
• You can only deduct unreimbursed IVF expenses. Insurance coverage or employer reimbursement (or using pre-tax dollars like an FSA/HSA) nullifies that portion for deduction purposes. You can’t get a double tax benefit.
• The deduction is limited to expenses paid for you, your spouse, or your dependents. This point is crucial and is the source of major exceptions discussed later (particularly with surrogacy arrangements).

In short, IVF is tax deductible under IRS rules – but only above certain income thresholds, and only if you go through the hoops of itemizing. It’s a possible tax break, not an automatic freebie.

🎯 Quick stat: IVF’s inclusion as a deductible expense can significantly soften the blow of its cost. And the costs are hefty – according to a 2024 survey by the Kaiser Family Foundation, cost is the number one barrier preventing women from obtaining needed fertility care. Tax deductions won’t make IVF cheap, but they can effectively refund a portion of your expenses via tax savings, making treatment a bit more affordable for many families.

⚠️ IVF Tax Deduction Pitfalls: What to Avoid

Even though IVF expenses are broadly deductible, not everything related to making a baby via IVF is fair game on your tax return. Many hopeful parents have made missteps trying to claim things they shouldn’t, or missing out on things they could. Here are critical “don’ts” and pitfalls to avoid:

• Don’t count on it if you don’t itemize: The #1 mistake is assuming “IVF is tax deductible” means you’ll automatically get money back. If you take the standard deduction (as most taxpayers do since the 2018 tax law expansion of the standard deduction), then you can’t separately deduct IVF costs. Run the numbers: itemizing only makes sense if your total deductions (medical + other itemizables like mortgage interest, state taxes, charity) exceed your standard deduction. If not, you won’t see a tax benefit from those IVF bills at all. Avoid disappointment by calculating this upfront.

• Don’t double-dip with pre-tax accounts: If you paid IVF bills using a Flexible Spending Account (FSA) or Health Savings Account (HSA), you already enjoyed tax-free dollars for those expenses. Do not also list them on Schedule A. The IRS prohibits deducting expenses that were already paid with pre-tax funds (since that would be two tax breaks for one expense). Similarly, any portion insurance paid is off-limits – only your out-of-pocket portion counts.

• Avoid claiming ineligible third-party costs: This is a big one. Payments to gestational surrogates or egg donors often feel like part of “the IVF process” for intended parents, but the IRS does not consider them deductible medical expenses for you. Why? U.S. tax law defines deductible medical care as affecting your (or your dependent’s or spouse’s) body or curing your illness.
  • Money you pay a surrogate mother for carrying a pregnancy, or compensation to an egg donor, is viewed as supporting someone else’s medical care – not yours. Numerous tax court cases have reinforced that surrogacy-related costs are not deductible (more on those cases later). So, as tempting as it is, avoid writing off surrogacy agency fees, surrogate medical bills, donor fees, or related legal costs. The IRS has consistently disallowed these, and claiming them could land you in a tough audit or owing back taxes.

• Don’t neglect record-keeping: IVF involves a flurry of bills – clinic procedures, embryology lab charges, pharmacy receipts for all those meds, travel to specialists, etc. The IRS requires documentation for medical deductions.
  • Avoid a paperwork scramble by keeping detailed records: invoices, receipts, mileage logs for driving to appointments (yes, you can deduct medical mileage at the IRS-approved rate), and any other proof of payment. Without receipts, your deduction could be denied if audited. Good records also ensure you include everything you’re entitled to – like that fertility acupuncture or the reproductive counseling sessions – while steering clear of things you can’t deduct.

• Don’t assume all states follow the IRS rules: We’ll dive deeper into state differences, but a quick warning: your state income taxes might not allow the same deduction as federal. For instance, some states (e.g. New Jersey) have an even lower AGI threshold (just 2% of income) for medical deductions, which is good news.
  • Others, like Pennsylvania, Ohio, or West Virginia, do not allow medical deductions at all on state returns – meaning your IVF expenses won’t help on your state taxes even if they do on your federal. And a few states have unique credits or rules for infertility treatment. Avoid assuming – check your state’s policy before you claim anything there.

• Beware the “Married Filing Separately” trick (it’s not for everyone): One strategy some couples consider is filing separate returns so that the spouse with huge IVF bills can use a lower individual AGI (making the 7.5% hurdle easier to clear). This can work in certain cases, but be careful: filing separately has its own drawbacks (loss of other tax benefits, higher tax rates in some brackets, etc.).
  • It’s not a universal win. Avoid this route unless a tax professional or very careful calculation shows that the medical deduction savings outweigh the downsides. And remember, if you file separately, you can only deduct medical expenses that each spouse paid from their own pocket – you can’t pool them like on a joint return.

By sidestepping these pitfalls, you’ll ensure that if you do qualify for an IVF tax deduction, you actually reap the benefit (and stay on the right side of the IRS). Now, let’s bring this to life with some examples to see how it works in practice.

Real-Life Examples: How IVF Tax Deductions Play Out

Nothing clarifies tax rules better than concrete examples. Below are a few common scenarios that hopeful parents face when it comes to IVF expenses and taxes. Each scenario shows how the deduction would (or wouldn’t) apply:

Scenario 💼	Tax Deduction Outcome 💰
Couple A: High IVF Costs, Moderate Income – Married couple spends $20,000 on IVF (one cycle, meds, and related fees) in a year. Their combined AGI is $100,000. They have no insurance coverage for IVF.	They choose to itemize deductions. 7.5% of AGI is $7,500, so only expenses above that count. With $20,000 of IVF and other medical costs, they have $12,500 in deductible medical expenses. This $12.5k will reduce their taxable income. Assuming they have other itemized deductions that already exceed the standard deduction, this IVF deduction yields real tax savings (potentially a few thousand dollars back, depending on their tax bracket).
Couple B: Moderate Expenses or High Income – Spends $5,000 on IVF-related costs. AGI is $100,000.	They cannot deduct these IVF costs federally because the $5,000 doesn’t exceed the $7,500 threshold (7.5% of $100k). Unless they had a lot of other medical bills, their IVF expense simply doesn’t meet the hurdle. They’d take the standard deduction instead. No direct tax break in this case.
Couple C: Surrogacy Journey – A couple pays $50,000 to a gestational surrogate and egg donor as part of having a child (gestational carrier arrangement). This includes agency fees, legal fees, the surrogate’s medical bills and a donor’s compensation, plus $5,000 on related IVF lab procedures.	Most of these costs are not deductible. The surrogate’s and donor’s expenses (and anything paid to agencies or lawyers for the arrangement) are personal costs not considered the couple’s medical care. The IRS would disallow those $50k. Only the $5,000 spent on IVF medical procedures directly for the couple (say, the lab fertilization of the donor egg with the father’s sperm) might be deductible – and even that depends on if those procedures are considered directly for the taxpayer’s medical care. In practice, this couple might end up with almost no deduction, despite hefty spending. It’s a heartbreaking tax result, but current law doesn’t recognize surrogacy costs as medical expenses for the parents.

As you can see, the tax outcome varies widely. Couple A’s case is the classic win for the medical deduction – high costs relative to income = a nice deduction. Couple B illustrates a very common outcome: many people find their IVF spending, while high, still isn’t high enough to cross 7.5% of a solid income (especially now that many folks have large standard deductions or get some insurance help). Couple C highlights the harsh reality for those using third-party reproduction: despite enormous expenditures, the tax code’s definition of “medical care” leaves them largely without relief.

It’s also worth considering timing and bundling strategies. Some families bunch medical procedures into one calendar year to maximize the chances of exceeding that 7.5% threshold. For example, if you’re on the cusp of it, you might plan multiple IVF cycles or other big healthcare expenses in the same tax year instead of spreading them over two years – that way, you can potentially deduct a chunk in one year and get some tax benefit, rather than get nothing by having smaller amounts in two separate years.

Finally, don’t forget ancillary costs in your calculations: mileage to and from the fertility clinic, airfare if you had to travel to a specialist clinic, lodging (up to $50 per person per night is deductible for medical travel), and even expenses like acupuncture or therapy if they are part of coping with or treating infertility. These can add to your total medical expense figure.

In a real-life example, one IVF patient tallied not just the $15,000 clinic bill, but also $600 in gas and tolls driving to appointments, $1,200 in airfare and hotel for an out-of-state egg retrieval, and $300 in fertility-related counseling – bringing her total deductibles closer to $17,100. Those little things might push you over the threshold if you’re near it. Every bit counts when you’re trying to maximize a deduction.

What the IRS and Courts Say: Evidence and Precedents 📜

Tax law isn’t just dry code – it’s shaped by IRS interpretations and even court battles. IVF and fertility treatments have prompted their fair share of IRS rulings and tax court cases, especially when it comes to edge scenarios like surrogacy or unconventional family-building. Here’s a look at the key guidance and legal precedents that define IVF tax deductions:

• IRS Publication 502 (Medical and Dental Expenses): This is the IRS’s go-to guide on what medical costs are deductible. The good news for IVF patients: Publication 502 explicitly lists “procedures to overcome an inability to have children” as qualified medical expenses. It even calls out in vitro fertilization by name, including expenses like temporary storage of eggs or sperm, surgery to reverse prior sterilization, and other fertility enhancement procedures.
  • In short, the IRS’s official guidance affirms that the core medical aspects of IVF are deductible. It also covers related items like prescription fertility drugs, required medical tests, and even fertility treatments such as intrauterine insemination (IUI) or artificial insemination – all count as medical care. The takeaway: The IRS is on record saying fertility treatment = medical treatment, for deduction purposes.

• What isn’t covered in Pub. 502? Notably, the publication does not give a green light to expenses for surrogate mothers or egg/sperm donor compensation. It remains silent on those, which in IRS-speak is telling – if something as significant (and increasingly common) as surrogacy were intended to be deductible, they likely would mention it. Instead, the IRS has addressed these through private rulings and court arguments, invariably taking the stance that such costs are not the taxpayer’s medical care.

• Tax Court case – Magdalin v. Commissioner (2008): One of the first major cases in this area. An unmarried man, William Magdalin, tried to deduct over $200,000 of expenses he paid for two children conceived via IVF using donor eggs and surrogates. He argued these were medical costs incurred to treat his medical inability to have children. The Tax Court disagreed, ruling that none of the expenses directly affected Magdalin’s own body – the medical procedures (egg retrieval, embryo creation, pregnancies) were performed on donors and surrogates, not on him.
  • The court held that medical deductions must relate to the taxpayer’s (or dependent’s) bodily functions. Since a surrogate’s pregnancy did not treat a disease of Magdalin’s body (it was essentially someone else carrying a child for him), it was not deductible. Magdalin lost the case, setting a precedent: costs of third-party reproductive arrangements are personal, not medical, for tax purposes.

• Tax Court case – Longino v. Commissioner (2013): This case involved a single male taxpayer who attempted to deduct IVF expenses paid for his girlfriend (and a surrogate) to have a child that he would raise. Again, the court disallowed the deduction. The girlfriend wasn’t his spouse or dependent at the time of treatment, and the procedures were not on his body. The court echoed Magdalin: only medical care for the taxpayer, spouse, or dependent counts. If you’re paying for someone else’s medical treatment (even if it’s to help you have a child), it’s not deductible.

• Appeals Court case – Morrissey v. United States (11th Cir. 2017): A noteworthy more recent case, involving a same-sex male couple who incurred costs for IVF and a gestational surrogate to have a child. They tried to deduct those costs, and the IRS said no. The couple sued in federal court. The Eleventh Circuit Court of Appeals ultimately sided with the IRS, citing the same principle – the medical treatments (egg donation, IVF lab work, surrogate pregnancy) did not involve the bodies of either taxpayer or a dependent at the time.
  • The court was sympathetic but firm that the tax code’s wording didn’t cover this situation. This case got attention because it highlighted how the law hadn’t kept pace with new family-building methods: the men had a legitimate medical need (they biologically couldn’t carry a pregnancy), but the law didn’t view solving that need via a surrogate as “their” medical care. Congress, not the courts, would have to change that.

• IRS Chief Counsel Advice / Private Letter Rulings: In 2023 and 2024, the IRS fielded questions about these issues, too. For example, a 2024 IRS Private Letter Ruling (PLR) requested by a taxpayer (later summarized publicly) addressed a scenario: a married woman unable to carry a pregnancy for medical reasons, using a donated egg and gestational surrogate. The PLR confirmed the IRS’s stance: expenses directly attributable to the taxpayer or spouse (like the husband’s sperm retrieval or any treatment on the wife’s body) were deductible, but all expenses related to the egg donor and surrogate were not.
  • That included the donor’s medical fees, the IVF lab work to create the embryo, the payments for the surrogate’s OB/GYN care and delivery, and associated legal/agency fees – none of that qualified, because it was considered to benefit third parties. The IRS essentially drew a line: IVF costs are only deductible to the extent they are for the care of the taxpayer, their spouse, or an existing dependent. Creating a baby via someone else’s body lies outside that line.

• Not all hope is lost – nuance for donor eggs/sperm: Interestingly, the IRS and courts have not yet explicitly struck down the deductibility of donor egg or sperm costs when the intended mother actually carries the pregnancy. There’s an argument (though untested in court directly) that if, say, a woman cannot produce viable eggs and uses an egg donor, the cost of obtaining that donor egg is part of treating her medical condition (infertility) because ultimately the embryo is implanted in her uterus and she’s the one pregnant – i.e. the medical care is affecting her body. Some tax experts lean toward allowing those expenses in that scenario, citing that it “affects a function of the body” of the taxpayer (the function being the woman’s ability to bear children).
  • American Surrogacy professionals often advise that donor eggs or donor sperm fees are deductible if medically necessary for the taxpayer’s treatment (with documentation from your doctor). So far, the IRS hasn’t challenged a case with that exact fact pattern publicly. The safest interpretation, though, is caution: if the donor’s contribution is entirely external (e.g. another woman carries the baby), it’s not deductible. If the donor’s contribution is used in your body (you carry the baby), there’s a reasonable position that it’s deductible – but be prepared to justify it. Always consult a tax advisor for these grey areas, because they truly are evolving.

• IRS vs. Congress vs. States: It’s worth noting that the IRS and courts strictly interpret the current law. But there are pushes to change things. Over the years, a few bills in Congress have been proposed to create an “IVF tax credit” or explicitly allow surrogacy expenses. For example, in 2023 a bill called the IVF for Families Act was introduced, aiming to give a federal tax credit (not just a deduction) up to a certain amount for fertility treatment costs.
  • This reflects a recognition that infertility is a medical condition that perhaps deserves more tax relief. As of now, though, no federal law specifically granting a credit or special deduction for IVF has passed. The landscape could shift if such legislation gains support. Until then, we rely on the general medical expense deduction and its limitations.

In summary, the evidence is clear: The IRS has consistently allowed standard IVF and fertility treatment costs to be deducted (subject to the usual rules), but has drawn a hard line against deducting the costs of third-party involvement like surrogacy. Court rulings back this up. While advocacy groups and some lawmakers are pushing for more inclusive tax breaks, at present the tax code has a traditional view of “medical care.” Knowing these rulings helps you understand how far you can go in claiming expenses – and why certain bills you paid won’t fly with the IRS.

IVF Deductions vs. Other Options: How Does It Stack Up?

Paying for IVF often involves mixing and matching financial strategies – and the tax deduction is just one piece of the puzzle. It helps to compare the IVF medical expense deduction with other forms of financial relief or benefits related to family-building. Here’s how it stacks up:

• Tax Deduction vs. Tax Credit: A deduction reduces your taxable income, which then saves you tax based on your tax bracket. By contrast, a tax credit is a dollar-for-dollar reduction of your tax bill. Currently, IVF only gets the deduction route (no federal credit). For instance, $10,000 of IVF expenses might save you roughly $2,200 in taxes if you’re in the 22% bracket and able to deduct it. If there were a $10,000 credit, it would save you $10,000 in taxes directly – a much bigger benefit. For perspective, adoption (another way to grow a family) has a specific federal tax credit (over $14,000 per child) which is often far more valuable than a deduction.
  • Unfortunately, there is no equivalent IVF credit at this time. A few states (like New York) have offered grants, and proposals exist for credits, but as of now, the deduction is what we have. Pros & Cons: A deduction is easier to claim if you qualify, but its value is limited by your tax bracket and the 7.5% rule. A credit (if it existed) would help more universally.

• IVF Deduction vs. HSA/FSA: Health Savings Accounts and Flexible Spending Accounts let you pay medical bills with pre-tax money. In effect, that’s very similar to getting a deduction (it’s like the tax savings upfront). If you have access to an HSA or FSA, you might wonder: use those or try to deduct? Generally, HSAs/FSAs are better because you get the tax benefit no matter how small the expense and without having to exceed an AGI threshold.
  • For example, you could put $5,000 in a pre-tax HSA and use it for IVF – you save taxes on that $5k immediately. If instead you paid $5k out-of-pocket and tried to deduct, you’d get $0 benefit if you didn’t clear 7.5% of AGI. However, annual contribution limits apply to HSAs/FSAs, so they might not cover a full IVF cycle cost. Many savvy patients max out these accounts for part of the cost and then try to deduct the rest if possible. Think of the deduction as a backup bonus for expenses above and beyond what you could run through a pre-tax account.

• Upfront cash vs. tax-time benefit: Paying for IVF usually requires having the money or financing available now, whereas the tax deduction gives relief many months later when you file your return (and only if you qualify). Some fertility patients consider medical financing loans or credit cards to cover costs.
  • The interest on such loans is not tax-deductible (medical interest isn’t like mortgage interest; it doesn’t get a break). But if a loan lets you get treatment sooner and the deduction later gives you a bit of a refund, that can offset some interest cost. Just be careful: don’t take on expensive debt assuming a huge tax refund unless you’re sure you qualify to itemize and deduct enough.

• Comparing insurance mandates and coverage: Some states mandate infertility coverage in health insurance, which can drastically reduce your out-of-pocket expenses (negating the need for a deduction because insurance pays). For instance, if you work for a company in Massachusetts or Illinois, your insurance might cover several IVF cycles – that’s obviously more valuable than a tax deduction. But if insurance covers it, you can’t deduct those costs (since you didn’t pay them).
  • So, while the deduction is nice, actual coverage or financial aid is better. Check if your state or employer offers fertility benefits; some companies now even directly reimburse IVF costs or offer special loans. Always coordinate: if you get a reimbursement or grant, you must exclude that from any tax deduction claim.

• Adoption Credit vs. IVF Deduction: It’s an emotional and financial crossroads for some: pursue IVF or consider adoption. From a strictly tax perspective, adoption is aided by that hefty federal tax credit, whereas IVF has only the deduction. That credit is nonrefundable but can be spread over years and often is easier to claim (no AGI percentage requirement, just max cap).
  • This doesn’t mean you choose family-building methods based on taxes, of course! But it’s a financial reality – some families, after unsuccessful IVF rounds, utilize the adoption credit when switching paths. There have been discussions about parity (giving infertility treatments similar credits), but nothing concrete yet. So, in comparison, the tax code currently incentivizes adoption expenses more than infertility treatment expenses.

• State-specific benefits: A few states step in where federal law doesn’t. For example, West Virginia allows a state income tax deduction up to $2,000 specifically for infertility treatment expenses (an unusual carve-out, given WV otherwise disallows medical deductions). New York doesn’t give a tax credit, but it funds an IVF grant program to help cover costs for eligible residents. Arkansas at one point offered a tax credit for infertility treatment, though with many restrictions. The lesson? Check your state: the federal deduction might be the main show, but a state could have a little bonus if you dig into the rules.

Below is a quick Pros and Cons summary of using the IVF tax deduction strategy:

Pros of IVF Tax Deduction	Cons of IVF Tax Deduction
Partial cost recovery: Reduces your taxable income, effectively giving you back a portion of what you spent (savings depends on your tax bracket).	Threshold hurdle: Only helps if your medical expenses are >7.5% of AGI – many people’s IVF costs won’t clear this, especially at higher incomes.
Recognizes infertility as medical: It affirms that infertility treatment is a legitimate healthcare expense, potentially reducing stigma (you’re treating a medical condition, not indulging in something elective).	Must itemize deductions: You forgo the standard deduction – which is large ($27,700 for married filing jointly in 2025, for example). You need sufficient total deductions to make itemizing worthwhile.
Can be substantial in high-cost cases: For those who spend very large sums on IVF (multiple cycles, etc.), the tax deduction can yield significant tax savings – sometimes thousands of dollars back.	Limited by other reimbursements: If insurance or grants cover some costs, or if you use HSA/FSA funds, the deductible portion is reduced. No double benefit.
Covers a broad range of related costs: Not just the IVF procedure – also medications, lab tests, doctor visits, even travel for treatment and fertility preservation (egg/sperm freezing related to IVF) are eligible expenses.	Excludes key expenses like surrogacy: Big chunks of modern family-building costs (surrogate fees, donor compensation, legal fees) don’t qualify, leaving a gap for those who need third-party help.
Year-by-year flexibility: If one year’s costs don’t exceed the threshold, but another year’s do (say you do two cycles in one year), you can get a deduction for that high-cost year. You’re not locked out completely if timing lines up.	Complexity and audit risk: Medical deductions can raise eyebrows if very large relative to income. You need thorough documentation and may face questions from the IRS. Plus, tax rules could change (Congress has adjusted the AGI threshold before).

Overall, using the IVF tax deduction is a game of numbers and documentation. It can be very worthwhile under the right circumstances, but it’s not a simple or guaranteed benefit. Many IVF patients find that, aside from the emotional rollercoaster of treatment, they’re also doing a financial balancing act: juggling costs, insurance fights, credit cards, savings accounts – and then at tax time, doing one more calculation to see if there’s some relief via Uncle Sam.

Decoding the Jargon: Key Terms and Concepts 🤓

Understanding IVF tax matters means wading into both fertility-speak and tax-speak. Here’s a quick glossary of crucial terms and phrases (bolded for emphasis) you’ll encounter:

• Adjusted Gross Income (AGI): In tax terms, this is your gross income minus certain adjustments (like retirement contributions, student loan interest, etc.). It’s the number used to calculate that 7.5% medical deduction threshold. Example: If your AGI is $80,000, the first $6,000 (which is 7.5% of 80k) of medical expenses isn’t deductible – you only deduct the excess over $6k.

• 7.5% Rule / Threshold: The federal requirement that you can deduct only medical expenses exceeding 7.5% of your AGI. This percentage has changed in the past (it was 10% for a few years). As of now it’s permanently 7.5%. The lower the percentage, the easier to deduct. Some states have different percentages (e.g., 4% in Alabama, 10% in Virginia, 2% in New Jersey). Always apply the correct number for the jurisdiction you’re dealing with.

• Itemized Deductions vs. Standard Deduction: When you file taxes, you choose between taking the standard deduction (a flat amount based on filing status) or itemizing your actual deductible expenses (like medical, state taxes, mortgage interest, charity). You can’t do both. IVF costs help you only if you itemize. The standard deduction is pretty high nowadays, which means fewer people itemize. For reference: In tax year 2025, standard deduction is around $13,850 for single filers, $27,700 for married filing jointly (these go up slightly each year). So you’d need itemizable expenses beyond those amounts to benefit from itemizing at all.

• Qualified Medical Expenses: This is IRS lingo for what counts as a medical deduction. It covers costs of diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body. Fertility treatments clearly fall here – treating the “disease” of infertility or affecting the function of reproductive organs. Qualified expenses include payments to medical professionals, labs, clinics, as well as prescription medications and medical devices.
  • Notably elective procedures solely for general health or cosmetic reasons don’t count – but IVF isn’t elective in the vanity sense; it’s a treatment for a specific medical condition (even if that condition is not being able to conceive naturally).
  • IRS Pub 502 provides an extensive list of what’s qualified. Some interesting ones that pertain to IVF: fertility monitors, ovulation predictor kits (likely deductible as diagnostic devices), storage fees for eggs/sperm/embryos (if medically necessary for fertility treatment), and even the cost of a vasectomy reversal or tubal ligation reversal (for those who had sterilization and then want to have kids, which ties into fertility).

• Dependent for Medical Expenses: You might be able to count medical expenses you paid for someone who wasn’t a dependent on your tax return only if they qualified as your dependent except for certain technicalities. For example, if you pay medical bills for your under-age-27 child who’s not actually on your return, or an aging parent you support (over the income limit to claim), some of those could still count. But this gets complex.
  • For IVF, typically you’re dealing with yourself and a spouse. It’s when third parties (like surrogates) come in that people ask “can the surrogate be my dependent for this?” – generally no, you can’t just claim a surrogate as a dependent; the person has to meet strict IRS dependent tests (mainly being a relative or living with you all year and you provide >50% support, plus low income, etc.). A contracted surrogate won’t qualify. An unborn child also can’t be a dependent, so you can’t claim medical expenses for the baby while still in utero being carried by someone else.

• Schedule A: The form used to report itemized deductions on your federal tax return. Medical and Dental Expenses are reported on Schedule A (Form 1040), starting on line 1 with your total medical expenses, then line 2 is your AGI and line 3 calculates 7.5% of AGI, line 4 the amount over that threshold (the part that’s actually deductible). It’s worth looking at this form to see how the math works. If you use tax software, it will do it, but understanding that layout helps make the process less abstract.

• Carryover of Medical Expenses: Unlike capital losses or charitable contributions, medical expenses cannot be carried over to future years. It’s a “use it or lose it” each tax year. If you have a huge IVF spend this year, deduct what you can (over 7.5% of AGI); if some amount was under the threshold, tough luck – you can’t save it for next year. Each year’s expenses stand alone for that year’s threshold. This is why, as mentioned, timing your cycles in one year might be beneficial rather than straddling years.

• FSA (Flexible Spending Account): An employer-provided benefit account where you can set aside money (usually up to ~$3,000/year) pre-tax for medical expenses. IVF costs are eligible uses for FSA money. The catch: “use it or lose it” within the plan year (some plans allow a small rollover or grace period). FSAs are especially useful for predictable, smaller fertility expenses like medication co-pays, preliminary testing, or portions of treatment. They essentially give you the tax savings upfront (similar to a deduction).

• HSA (Health Savings Account): Available if you have a high-deductible health plan. Contribution limits are higher (around $7,750/year family in 2025). HSAs are great because they don’t expire each year – funds roll over indefinitely and can even be invested. IVF is a qualified medical expense for HSA use as well. If you have the ability to use an HSA, it’s like a stealth super-deduction: you contribute pre-tax, pay IVF bills from it, and bypass the 7.5% rule entirely. Plus, HSAs have a triple tax benefit (pre-tax in, tax-free growth, tax-free out for medical). Many financial advisors will say: use HSA dollars for any big medical outlays first, then whatever you couldn’t cover, maybe you look at itemizing.

• State Income Tax Deductions/Credits: Each state with an income tax has its own rules. For IVF costs, important terms include “medical deduction floor” (the AGI percentage, if any, a state requires – e.g. some states use the same 7.5% as federal, others have no threshold or a different one) and “decoupling from federal itemized” (some states like Illinois or Arizona let you itemize medical on the state return even if you didn’t on federal).
  • A term like “allowable medical modification” might appear in state tax instructions – meaning an amount you can subtract from income for medical costs. States may also have specific credits (a direct subtraction from tax) for certain medical expenses, but that’s rarer. For fertility, states like Arkansas had a limited credit historically (like a portion of IVF costs up to a cap). Always search “[Your State] medical deduction infertility” to see if something unique pops up.

• Surrogacy: Just to define in our context – surrogacy is when another woman carries a pregnancy for the intended parents. Gestational surrogacy (the surrogate is not genetically related to the baby) often involves IVF (embryo created from intended parents’ or donors’ gametes, then transferred). Traditional surrogacy (surrogate’s own egg is used) is less common now.
  • For tax: both are treated the same – the surrogate’s medical costs and fees are not deductible by the intended parents. Surrogacy introduces additional expenditures like agency fees, legal contracts, and often compensation to the surrogate; none of that fits into “medical care of the taxpayer.” It’s important to just define it here because people sometimes think “medical expense is medical expense, why does it matter who’s getting it?” – the definitions above (taxpayer, spouse, dependent) are why it matters.

• Egg/Sperm Donation: When someone donates eggs or sperm for use in your IVF. The costs might include the donor’s medical evaluations, the procedure to retrieve eggs, donor compensation, agency fees. As noted, deductibility hinges on context. If those donated gametes are used so that you can carry a pregnancy, some or all costs could be considered part of treating your condition.
  • If a surrogate carries, then the donor’s contribution is not affecting your body. It’s a fine line. The term “donor-related expenses” will often show up in tax discussions – usually cautioning that they’re not clearly allowed. When in doubt, conservatism wins: assume they’re not deductible unless you have a strong case otherwise.

• Preventive or Fertility Preservation Procedures: What if you freeze eggs or sperm now to use later (maybe you’re undergoing cancer treatment that could cause infertility)? The IRS does allow deductions for fertility preservation if it’s part of medical care. For example, egg freezing for a medical reason (like impending chemo) is a qualified expense.
  • If you later use those eggs in IVF, you can deduct the IVF costs too. Elective egg freezing (no immediate infertility, just postponing childbearing) is a gray area – not clearly for treatment of a current illness, so it might not qualify. The IRS hasn’t explicitly ruled on elective egg freezing. But if you eventually use those eggs due to age-related infertility, one could argue the initial freezing was part of fertility treatment. This is emerging territory in tax law.

Armed with these terms, you can better understand official guidance or discuss your situation with a tax professional without getting lost in translation. Fertility treatment already comes with a learning curve; unfortunately, the tax part is a whole other jargon-filled realm – but now you’re conversant in both.

The Federal vs. State Tax Puzzle 🗺️ (Why Location Matters)

When it comes to deducting IVF expenses, federal law is just the starting point. State income tax rules can diverge significantly, meaning the benefit (or lack thereof) on your state return might not mirror your federal outcome. Some states piggyback on the IRS definitions, while others throw in their own twists. Here’s a breakdown of how federal vs. state rules compare, and a snapshot of state nuances:

Federal (IRS) Rules 🇺🇸	State Tax Nuances 🏠
Deduction threshold: 7.5% of AGI must be exceeded by medical expenses (including IVF) to deduct. This applies to all taxpayers regardless of age (recent law made 7.5% permanent).	Varied thresholds: Some states are more lenient. New Jersey only requires expenses >2% of income – a much easier bar, so many NJ taxpayers can deduct some IVF costs on their state return even if they couldn’t federally. Alabama and Nebraska use a 4% threshold. On the flip side, Virginia, South Carolina, Arkansas use a 10% threshold (stricter than federal). Many states (like California, New York, Illinois, etc.) simply use the same 7.5% rule as federal.
Eligible expenses: Follows IRS definitions (most IVF-related costs qualify, surrogacy and purely elective items do not). All must be unreimbursed and paid by the taxpayer for self/spouse/dependent.	Mostly follows IRS definitions: States generally defer to the IRS on what counts as a medical expense. If the IRS wouldn’t let you deduct it, your state likely won’t either (and vice versa). However, a few states have special inclusions: e.g., West Virginia (despite not allowing general medical deductions) has a unique deduction up to $2,000 specifically for infertility treatment expenses, written into state law. This means WV residents could subtract up to $2k of IVF costs on their state income (even though they can’t deduct other medical costs). Such targeted provisions are rare but illustrate that state legislatures can carve out fertility benefits if they choose.
Must itemize to deduct: Medical expenses are part of itemized deductions on Schedule A. If you take the standard deduction federally, you get no federal tax benefit for IVF.	Itemize or not, depending on state: Here’s a tricky part – some states require that you itemize on the federal return to itemize on the state, but others allow you to itemize for state purposes even if you took the standard federally. For example, Arizona and Maryland let you claim itemized deductions (including medical) on the state return regardless of what you did on the federal. Rhode Island doesn’t use federal itemized deductions at all (it has its own system). Colorado and Vermont don’t allow itemized deductions at the state level (they give a standard deduction only), so no opportunity to deduct medical on the state return at all. Always check your state’s tax instructions – the interplay can be surprising.
No income tax = no deduction: (Obviously, at the federal level there is an income tax.)	States with no income tax: If you live in a state with no state income tax (e.g. Florida, Texas, Tennessee, etc.), there’s no state tax return, period. So while you might get a federal deduction, there’s simply no place to deduct on a state level. The benefit you get is purely federal in that case.
Credits: No special federal credit for IVF (just the general deduction).	State credits or grants: A handful of states have, at times, offered credits. Arkansas had a limited IVF credit (it was small and had conditions). Georgia introduced an “infertility treatment tax credit” effective 2024, offering a credit for certain fertility treatment costs (with caps and only for certain treatments). New York’s grant program isn’t a tax credit, but functions as state-administered financial aid. These programs come and go, so it’s vital to see if your state legislature passed any fertility-specific tax incentive recently. State credits are often limited by income or available to a certain number of applicants.

To sum it up, your state could make a big difference in your overall tax outcome:

• In a state like New Jersey, a couple with $10,000 of IVF costs and $100,000 income would get nothing federally (under 7.5% AGI) but could deduct $8,000 on their NJ return (over 2% of AGI) – a tangible state tax savings.
• In Pennsylvania, that same couple gets nothing at state level either, because PA disallows all medical expense deductions (Pennsylvania has a very limited personal income tax system with few deductions).
• In West Virginia, if that couple spent a whopping $50,000, federally they’d deduct a big amount (over the threshold), but WV doesn’t allow general medical deductions. They would, however, be able to claim the special $2,000 infertility deduction – better than nothing, but certainly not as generous as a full deduction would be.

Action item: Always review your own state’s tax guidelines or consult a local tax expert. State rules can change more frequently and are sometimes buried in the fine print. You don’t want to leave money on the table or inadvertently claim something not allowed. Each state’s tax authority (often the Department of Revenue or Taxation) typically publishes a tax guide that includes a section on medical deductions and any state modifications.

Finally, keep an eye on your state’s legislative agenda. As fertility issues gain more public attention, some states are considering fertility tax credits, insurance mandates, or other relief. For instance, Arizona recently debated a credit for IVF costs (it didn’t pass as of last update, but could resurface). And as noted earlier, Georgia’s new credit shows states stepping in to help with what insurance often doesn’t cover. State tax relief can sometimes fly under the radar, but when you’re spending tens of thousands on treatment, even a modest credit or deduction at 5% state tax can mean a few hundred bucks back – worth the effort of claiming.

Who’s Who and What’s What: Entities and People Shaping IVF Tax Policy

The topic of IVF tax deductions might seem niche, but it intersects with many players – from government bodies to advocacy groups. Here are some of the key entities, organizations, and even individuals connected to the world of fertility and taxes, and how they influence or reflect the rules:

• Internal Revenue Service (IRS): The U.S. tax authority, ultimately responsible for interpreting and enforcing tax laws regarding deductions. The IRS issues guidelines like Publication 502 and rulings (e.g., private letter rulings) that clarify deductibility of fertility treatments. While Congress writes the tax laws, the IRS’s interpretation determines how those laws apply to IVF expenses in practice. For example, the IRS could choose to issue a revenue ruling explicitly on surrogacy costs (so far they haven’t, but rely on existing code and court cases).
  • Most interaction everyday taxpayers have is simply following IRS forms and instructions – hence if IRS instructions say “IVF is deductible medical expense,” people take that as green light. The IRS also could audit returns and challenge improper deductions (say someone deducted surrogate fees – the IRS examiner would reference their rules to disallow it).

• U.S. Tax Court (and other courts): The Tax Court is where you can dispute IRS decisions. As we saw with Magdalin, Longino, etc., the courts have weighed in on IVF-related deductions. Judges like in those cases often make sympathetic comments in their opinions, acknowledging the taxpayers’ genuine medical struggles, but underline that they must apply the law as written. These cases become part of the precedent that guides future IRS and taxpayer behavior. Eleventh Circuit Court of Appeals (handled the Morrissey case) and other appellate courts also shape the landscape – if different circuits ruled differently, it could even set up a Supreme Court issue, but so far courts have been consistent.

• Congress: The U.S. Congress writes the Internal Revenue Code. Currently, the code (Section 213) allows medical deductions, but does not specially address infertility or reproductive technology. Individual members of Congress have shown interest in changing this. For instance, Rep. Ashley Hinson and others introduced versions of an “Adoptive and Fertility Tax Credit” in the past. In 2023, Rep. Mariannette Miller-Meeks introduced an IVF tax credit bill (which proposed a refundable credit up to $25k for IVF costs).
  • Though such bills haven’t become law, they indicate growing awareness. If public sentiment and lobbying from infertility advocacy groups increase, Congress could amend the tax code to explicitly allow, say, surrogacy as a medical expense, or implement a credit. Senators also have voiced interest, sometimes tying it to broader healthcare or family support legislation. So, while nothing is passed yet, the activity in Congress is something to watch – these are the folks who could fundamentally change the rules.

• State Legislatures: At the state level, lawmakers have more directly intervened at times. For example, the West Virginia legislature clearly decided to give a small infertility deduction. New York’s legislature funds the Infertility Demonstration Program (grant). Georgia’s legislature passed the new credit. These often come from local advocacy – residents pushing their state reps for help due to the high cost of IVF. State lawmakers might not change federal law, but they can create state credits/deductions or insurance mandates. Insurance mandates (found in 20+ states) require some insurance plans to cover IVF or fertility treatment – that isn’t a tax policy, but definitely affects the economics for patients (if insurance pays, no deduction needed for that portion). Entities like state insurance commissions and legislatures jointly shape those rules.

• Advocacy and Support Organizations: RESOLVE: The National Infertility Association is a major non-profit advocating for infertility issues. They lobby for things like family-building-friendly legislation, including improved insurance coverage and tax credits. RESOLVE often organizes advocacy days where constituents talk to Congress members about bills to help with IVF costs. They keep track of which states have what benefits and push for improvements.
  • ASRM (American Society for Reproductive Medicine), while primarily a professional medical organization, also uses its voice to highlight how cost is a barrier; they provide data (like that 67% stat) which lawmakers can use to justify policy changes. These organizations might not directly change the law, but they heavily influence the conversation and provide expert testimony or research that shapes policies.

• Tax Professionals and Financial Advisors: On a more individual level, CPAs, tax attorneys, and financial planners become key players for patients going through IVF. Professionals aware of these niche rules can help families maximize deductions or avoid pitfalls. Some CPAs write articles in journals about the treatment of infertility expenses, clarifying grey areas.
  • A notable example: Ed Zollars, CPA, who wrote about the 2025 IRS ruling on IVF and surrogacy – practitioners like him break down the new developments for others in the field. If you’re undertaking fertility treatments, finding a tax professional who is familiar with medical deductions (and ideally fertility cases) can be a huge plus. They are the ones who might know, “Hey, your state actually gives a credit” or “Let’s consider filing separately due to your situation” etc. There’s even a niche of “fertility financial coaches” nowadays, who help plan how to pay for treatments – they often know about these tax angles as part of the bigger picture.

• Healthcare Providers and Clinics: Fertility clinics themselves sometimes provide guidance or letters. For example, a clinic might give a patient an itemized statement of all expenses which the patient can use for taxes. Some clinics’ financial coordinators might mention “keep your receipts, some patients deduct these expenses.” They won’t give formal tax advice, but their role is to facilitate financial aspects of treatment, and many are aware that cost is a barrier. There are also third-party services (loan companies, grant programs) that highlight the tax deduction in their materials, essentially saying “P.S. you might get some of this back in taxes.” It’s all part of the ecosystem helping patients navigate cost.

• Public Figures and Stories: Occasionally, a personal story makes waves and indirectly influences things. For instance, when high-profile individuals talk about their IVF journeys (celebrity or not), or when a case like Morrissey gets media attention, it raises public awareness. If a well-known figure were denied a deduction for surrogacy and spoke out, it could add pressure for change. Think of how hearing “Couple spends $100k on surrogacy, IRS gives no relief” might play in public sentiment. While no single person can change policy, the collective narrative can. We saw some public conversation after the Eleventh Circuit case, noting the inequity for same-sex couples. Over time, these conversations can lead policymakers to adjust laws.

• Technologies & Industry: Finally, the fertility industry’s advancements themselves play a role. The more common a technology becomes, the more it enters tax discussions. Preimplantation Genetic Testing (PGT), for example, is often done with IVF – it’s a lab test on embryos to screen for genetic issues. It’s clearly a medical procedure, so it’s deductible, but if one didn’t know, they might wonder. As new treatments emerge (like, say, uterine transplants or future innovations), the IRS will have to keep addressing what qualifies.
  • Even things like the cost of cryopreservation for cancer patients – once rare, now more mainstream – led the IRS to acknowledge those as valid medical expenses. The more people use a technology, the more likely it will be clarified in tax policy. The IVF industry, now a multi-billion dollar field (with an estimated $8-9 billion spent in U.S. fertility clinics in 2023), means a lot of people have these expenses. That scale alone pushes tax issues to be addressed more clearly, either through updated IRS guidance or new laws.

In essence, the tax treatment of IVF doesn’t exist in a vacuum. It’s shaped by a tapestry of actors: the tax authorities applying old laws to new situations, lawmakers considering updates, advocates pushing for fairness, and families and professionals navigating the rules on the ground. Staying informed via reliable sources (IRS announcements, RESOLVE’s updates, tax news) is wise, because this is an area of law that could evolve in the coming years as the conversation around infertility becomes louder.

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FAQ: Common Questions on Deducting IVF Expenses

Q: Can I deduct IVF expenses on my federal taxes?
A: Yes. You can deduct IVF and related medical expenses on your federal tax return if you itemize and your total unreimbursed medical costs exceed 7.5% of your AGI for the year.

Q: Are fertility drugs and IVF medications tax-deductible?
A: Yes. Prescription medications for IVF (ovulation stimulators, hormone injections, etc.) are qualified medical expenses and count toward your deduction if you itemize and meet the AGI threshold.

Q: Do I get a tax credit for IVF?
A: No. There is currently no federal tax credit for IVF expenses. You can only get a deduction if you qualify. (A few states offer credits or grants, but federally there’s no IVF-specific credit.)

Q: Can I deduct the cost of a surrogate or egg donor?
A: No. Payments for a surrogate mother’s medical bills or any compensation to a surrogate or egg donor are not deductible for the intended parents under current IRS rules.

Q: If my insurance covered some IVF costs, can I deduct the rest?
A: Yes. You can deduct only the portion of IVF expenses you paid out-of-pocket. Any amount reimbursed by insurance (or paid with FSA/HSA funds) cannot be included in your deductible expenses.

Q: Are travel and lodging for IVF treatment deductible?
A: Yes. Travel expenses for medical care are deductible. This includes mileage (or airfare) to get to an IVF clinic and lodging up to $50 per night per person. These count toward your medical expense total.

Q: Can unmarried individuals deduct IVF or fertility treatment costs?
A: Yes. Being unmarried doesn’t bar you from the deduction. If you pay for IVF for yourself and meet the 7.5% AGI rule, you can deduct it. However, you generally cannot deduct treatment costs of a partner unless they qualify as your dependent.

Q: Should my spouse and I file separately to maximize an IVF deduction?
A: Yes (sometimes). Filing separately can help if one spouse’s income is much lower and that spouse had high IVF bills, making the 7.5% threshold easier to exceed. But consider other tax trade-offs before doing this.

Q: Can I use my Health Savings Account (HSA) or FSA for IVF?
A: Yes. IVF is an eligible medical expense for HSAs and FSAs. Using those accounts lets you pay with pre-tax dollars (yielding similar tax savings), but you then cannot also deduct those same expenses.

Q: Is IVF for genetic testing purposes deductible?
A: Yes. IVF done primarily to prevent genetic disease or for embryo testing is still a medical procedure. It qualifies as a deductible expense, provided you meet the standard criteria (itemize and exceed the AGI threshold).

Q: If I finance IVF with a loan or credit card, can I deduct the payments?
A: No. You can deduct the medical expense in the year it’s paid to the provider (even if borrowed funds). But you cannot deduct the loan repayments or interest. Only the actual medical charges qualify.