What medical expenses qualify as deductible under 2026 federal tax rules?
Executive summary
The federal medical expense deduction in 2026 remains an itemized-only break: taxpayers can deduct unreimbursed medical and dental expenses paid for themselves, their spouse and dependents only to the extent those expenses exceed 7.5% of adjusted gross income (AGI) [1]. What counts is detailed in IRS Publication 502 and Topic 502 — routine payments to medical practitioners, qualifying transportation and certain insurance premiums can qualify, but pre-tax employer-paid premiums and many reimbursements are excluded [2] [1].
1. What the law actually requires: itemize and clear the 7.5% AGI floor
To use the medical expense deduction a taxpayer must itemize on Schedule A; only the portion of total qualifying medical expenses that exceeds 7.5% of AGI is deductible for tax year 2026 [1]. This AGI-floor rule is the single biggest gating factor for most households and remains unchanged in the IRS guidance for medical and dental expenses [1] [2].
2. Who’s covered: self, spouse and dependents
Deductible medical costs are limited to amounts paid for the taxpayer, the taxpayer’s spouse and dependents during the taxable year — if an expense benefits someone outside those categories, it generally isn’t deductible under federal rules described in Publication 502 [2].
3. Classic qualifying expenses: doctors, dentists, procedures and insurance
Payments to medical practitioners — doctors, dentists, surgeons, chiropractors, psychiatrists and psychologists — and costs for diagnosis, cure, mitigation, treatment or prevention of disease are within the IRS definition of medical expenses, as explained in Publication 502 and IRS Topic 502 [2] [1]. Insurance premiums for medical care or certain long‑term care insurance premiums can also qualify, but only to the extent they are paid with after‑tax dollars and meet other account rules [2] [3].
4. What about employer-paid and pre-tax premiums?
Premiums paid through employer premium-conversion or cafeteria plans (pre-tax reductions) are not deductible because that money was never included in gross income; likewise, employer-paid plan benefits generally don’t qualify unless the premium amount is actually included in Box 1 of Form W‑2 [1] [2].
5. Transportation and ancillary costs that count
Out‑of‑pocket transportation expenses essential to medical care — personal car costs using the IRS medical mileage rate, or actual expenses for gas and oil plus tolls and parking, taxi/bus/train fare and ambulance costs — are eligible medical expenses when primarily for and essential to medical care, per IRS Topic 502 [1].
6. Special categories: HSAs, Medicare and long‑term care limits
Health Savings Account contributions remain a separate tax benefit: HSA contributions lower taxable income and can be used tax‑free for qualified medical expenses, but HSA-qualified plans and HSA rules are distinct from the Schedule A medical expense deduction [4]. Medicare-related outlays such as premiums and deductibles can be counted if paid with after‑tax dollars, but whether a specific Medicare cost is deductible depends on the taxpayer’s situation and Publication 502 details [5] [2]. Long‑term care insurance premiums are deductible up to age‑based IRS limits that increased for 2026, and only policies meeting federal tax‑qualified requirements are eligible for the deduction [3].
7. Reimbursements, timing and repairs to property used for medical care
Publication 502 covers how to treat reimbursements: if insurance or an HRA reimburses expenses, the deductible amount must be reduced; expenses paid in one year but reimbursed in another have special reporting rules [2]. Certain home improvements or property adapted for medical needs may be deductible to the extent they do not increase property value beyond medical necessity, per IRS guidance [2].
8. Limits, policy debates and practical planning
High-income taxpayers face a new itemized deduction limitation in 2026 that can reduce allowable itemized deductions for those in the top bracket, potentially affecting the practical benefit of large medical bills [6]. Proposals in Congress to expand or create new health-care deductions remain politically contested and would change the landscape if enacted; for now, the federal system relies on the itemized 7.5% AGI threshold while some states use lower thresholds, producing divergent results for taxpayers across jurisdictions [7] [8].
9. Bottom line for taxpayers
The 2026 federal rules allow deduction of unreimbursed, qualifying medical and dental expenses that exceed 7.5% of AGI when itemizing; qualifying items include practitioner fees, qualifying premiums paid with after‑tax dollars, transportation for medical care and age-limited long‑term care premiums, while pre‑tax employer contributions and reimbursed expenses are excluded [1] [2] [3]. Taxpayers should consult Publication 502 and Topic 502 for line‑by‑line guidance and consider state rules and recent IRS inflation adjustments that affect related limits [2] [9].