How have 2025 IRS rules changed substantiation for medical expense deductions?
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Executive summary
The IRS updated two administrative items in 2025 that affect how taxpayers substantiate medical expense deductions: the out‑of‑pocket health care “national standards” took effect April 21, 2025 and let taxpayers claim a standard monthly allowance per person without detailed receipts up to that amount (effective April 21, 2025) [1]. The core rules for what counts as a deductible medical expense and the 7.5% of AGI threshold remain in Publication 502 and Topic 502, which describe allowed items, timing, and that unreimbursed expenses above 7.5% AGI are deductible when itemizing [2] [3].
1. What actually changed: a new optional “standard” for out‑of‑pocket health costs
Beginning April 21, 2025 the IRS published national out‑of‑pocket health care standards that allow taxpayers to claim a per‑person standard monthly amount without proving each receipt — for federal tax administration purposes only [1]. The standards set minimum allowances based on survey data and let taxpayers use the standard amount monthly “without questioning the amounts they actually spend” up to that limit; if a taxpayer claims more than the standard, the IRS requires documentation to substantiate the excess [1].
2. What didn’t change: the definition of deductible medical expenses and the 7.5% AGI floor
The underlying statutory framework — Section 213 rules reflected in Publication 502 and Topic 502 — remains the guide for which medical costs qualify (diagnosis, cure, mitigation, treatment, prevention, and certain related travel and equipment) and that only unreimbursed expenses that exceed 7.5% of adjusted gross income are deductible when you itemize [2] [3] [4]. Publication 502 continues to enumerate specific inclusions and exclusions, such as special‑food rules that require physician substantiation [2].
3. Practical effect: easier substantiation up to the standard, documentation required beyond it
The national standards are an administrative convenience: taxpayers can rely on a per‑person monthly allowance as a presumptive amount for out‑of‑pocket health spending unless they claim more, at which point they must provide receipts or other evidence [1]. That shifts some burden from item‑by‑item proof to a ceilings‑first approach for federal examiners — but does not eliminate the need to keep records if you expect to claim amounts above the standard [1].
4. What taxpayers must still do: match expenses to Publication 502 rules
Even if you use the national standard, you must ensure the expense itself qualifies under Publication 502’s rules — e.g., medical transportation at the standard mileage rate (21 cents per mile for medical use in 2025 as set by IRS Notice 2025‑5), special foods only if physician‑substantiated, and exclusions for general wellness items [2] [5] [6]. Publication 502 and IRS FAQs remain the authorities for qualifying items [2] [4].
5. Where ambiguity and competing views remain
IRS administrative guidance creates an easier path for substantiation, but available sources do not state whether adoption of the standard will materially change audit rates or taxpayer behavior — nor do they quantify how many taxpayers will benefit. Commentary and tax‑preparer guides published outside the IRS (e.g., TurboTax, NerdWallet, FileLater) stress recordkeeping and note modest expansions or clarifications for 2025, but these are interpretive and sometimes assert broader changes (like expanded OTC items) that the IRS sources here do not confirm [7] [8] [9]. Available sources do not mention whether the standard applies to state returns or bankruptcy calculations beyond a methodological note that the standards are “for purposes of federal tax administration only” [1].
6. Strategy: use the standard but keep receipts for bigger claims
Taxpayers with modest, regular medical outlays may find the standard simplifies reporting and substantiation up to the published monthly amounts; but those with large, irregular costs should continue meticulous documentation because Publication 502’s item rules and the 7.5% AGI floor still dictate deductibility and the IRS will require proof for amounts exceeding the standard [1] [2] [3].
7. The policy angle: administrative relief, not a change to who gets relief
The national standards are an administrative tool to reduce record disputes, not a broadened substantive tax benefit. The deduction’s distributional limits — high take‑up costs, the 7.5% AGI floor, and the prevalence of the standard deduction — remain reasons many taxpayers do not realize IMD benefits, a dynamic described in policy analyses [10] [11]. The standards lower one procedural barrier but do not alter the economic logic that concentrates benefits among those who itemize and exceed the AGI threshold [1] [3].
Limitations: this analysis relies on IRS publications and related guidance included in the provided materials; available sources do not report implementation outcomes, audit guidance beyond the standard, or state‑level effects [1] [2].