Keep Factually independent
Whether you agree or disagree with our analysis, these conversations matter for democracy. We don't take money from political groups - even a $5 donation helps us keep it that way.
Are personal medical expense deductions eliminated in the new budget??
Executive Summary
The claim that the new budget eliminates personal medical expense deductions is not supported by the available analyses: multiple recent summaries and tax guidance indicate the medical expense deduction remains available under current law, subject to the familiar AGI threshold and itemization rules (examples include analyses dated April–August 2025) [1] [2] [3]. A minority of older or speculative analyses flagged proposals or past debates about repealing or trimming the deduction, but those do not reflect enacted law in the sources provided [4] [5].
1. What the mainstream recent summaries actually report — deduction survives for now
Recent, contemporaneous overviews of the 2025 budget and tax legislation report no explicit elimination of the personal medical expense deduction. Practical tax guidance reiterates that taxpayers can deduct qualified unreimbursed medical expenses exceeding 7.5% of adjusted gross income, and that claiming the deduction requires itemizing on Schedule A, which means many filers will still find the deduction unusable if they take the standard deduction [1] [6]. The 2025 reconciliation and “One Big Beautiful Bill” coverage emphasizes changes to Medicaid, Medicare, HSAs, and other health provisions, but these analyses do not identify a repeal of the medical expense deduction as part of enacted changes, signaling continuity rather than termination [2] [3]. This line of reporting is important because policy-neutral technical tax guidance and legislative summaries focus on explicit statutory changes; absence of mention implies no direct repeal was enacted in the materials reviewed [7].
2. Where the confusion comes from — proposals, offsets, and policy drafts
Some policy proposals and earlier drafts have proposed eliminating or trimming the medical expense deduction to offset tax cuts or simplify the code; those proposals fuel public confusion and activist commentary. A 2024 policy analysis raised the prospect that eliminating the deduction could help pay for other tax cuts, warning of harm to families with large out-of-pocket bills [4]. Separately, reactions to the 2017 Tax Cuts and Jobs Act and subsequent debates have historically included proposals to alter itemized deductions, which is why older opposition statements and advocacy are sometimes cited as if they reflect current law [5]. These sources show agenda-driven attention: progressive policy groups emphasized potential harm from repeal, while some tax-cut proponents viewed deduction changes as revenue offsets, illustrating why draft proposals can be mistaken for enacted policy [4] [5].
3. Technical status and rules you should remember right now
Under the rules reiterated by tax guidance in the provided materials, the deduction remains tied to itemization and the 7.5% of AGI floor; that means only taxpayers with significant unreimbursed medical costs relative to income benefit [1] [6]. The practical effect is that many taxpayers will not use the deduction because of the higher standard deduction thresholds permanently extended in the recent bills, which indirectly reduces the number claiming itemized deductions even when the medical expense deduction itself is unchanged [8] [1]. Thus, the technical survival of the deduction does not imply broad usage; policy debates often conflate the presence of the statutory deduction with the political reality that fewer taxpayers claim it after standard deduction increases [8].
4. Competing narratives and possible motives behind claims of elimination
Claims that the deduction was “eliminated” frequently stem from shorthand summaries of complex bills or from advocacy messaging designed to highlight impacts. Progressive groups warned that elimination would disproportionately harm middle-income families with catastrophic medical costs, framing repeal as an austerity move, while some proponents of tax consolidation framed deduction limits as necessary offsets for rate cuts. Those advocacy-driven narratives emphasize outcomes rather than statutory detail and can lead to misleading headlines suggesting the deduction is gone when policy text merely contemplates change or leaves it intact [4] [9]. Evaluating motive matters: sources urging action tend to stress harm, while policy briefers focused on revenue needs present repeal as an instrument for offsetting reductions elsewhere [4] [8].
5. Bottom line for taxpayers and what to watch next
Based on the most recent materials supplied, the medical expense deduction has not been eliminated in enacted law covered by these analyses; it remains available under the existing AGI-floor and itemization rules [1] [2]. Taxpayers should monitor future legislative text and official IRS guidance for any explicit statutory changes, and remember that broader tax changes—such as higher standard deductions or other itemized deduction limits—can reduce practical access to the deduction without repealing it outright [8] [3]. If you or your organization face high unreimbursed medical costs, consult updated IRS guidance or a tax professional in light of your filing status and the most recent enacted provisions cited here [6] [1].