FSA AND OTC DRUGS
FER
1 Post
According to information I have received, the Treasury Dept and the IRS recently announced that over-the-counter drugs can be paid for with pre-tax dollars through health care FSA's. According to the new ruling, reimbursements by health FSA's for the cost of legal (emphasis on legal) non-prescription drugs are not subject to tax. Of course, they have to be properly documented. The IRS says that the deciding factor in determining if the expense is not subject to tax is whether the expense was "for medical care".
It seems to me that this puts the FSA administrator is the awkward position of making decisions as to the applicability of non-prescription drugs (and other non-prescription items) to medical care.
Has anyone addressed the question of how to determine the applicability of non-prescription expenses to "medical care"?
It seems to me that this puts the FSA administrator is the awkward position of making decisions as to the applicability of non-prescription drugs (and other non-prescription items) to medical care.
Has anyone addressed the question of how to determine the applicability of non-prescription expenses to "medical care"?
Comments
To summarize, vitamins and dietary supplements, those things which are merely "beneficial" to one's health, are excluded. On the other hand, those things which are used to treat a condition or ailment (decongestants, cough medicine, etc.) can be reimbursed on a section 125 cafeteria plan.
There is an article on the IRS web site.