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New IRS Ruling: Certain Prescribed Exercise Treatment Expenses for Medically-Obese Are Tax Deductible

The IRS ruled (2002-19) that medically prescribed physical activity for the treatment of obesity can be tax deductible in certain circumstances. In the most simplistic terms, health club dues and meeting fees for weight loss programs would generally be tax exempt or eligible for payment using pre-tax flexible spending accounts. However, the deductibility of the health club cost is not clear should the obese patient lose the weight and no longer be considered obese. It also is not clear if home fitness equipment purchased to treat obesity would qualify under the IRS ruling.

Not all health club membership expenses would automatically qualify. First a Doctor must diagnose a patient as obese and prescribe physical activity as a treatment of the condition. Only if a doctor prescribes exercise to treat the condition would health club dues may be deductible as a medical expense. Additionally health club dues for medically prescribed physical activity would qualify for payment from a pre-tax Flexible Savings Account. However, club dues are not automatically tax deductible as the IRS will consider several factors such as location of club, types of activities offered and whether or not the taxpayer could fulfill exercise needs without joining facility before allowing deduction of club dues.

If a medically obese taxpayer joins a health club, loses weight and is no longer deemed obese the tax exemption could be denied, but there is no clear guidelines on this scenario. Further the tax deductibility of home fitness equipment for medically obese individuals is questionable. However, meeting fees for weight loss programs are generally accepted as deductible expenses.