The short answer to the question “are DNA tests tax deductible?” is: It depends!
Of course, you will want to talk to a tax professional before taking any action related to the tax deductible nature of DNA testing. We are not accountants, but we want to help you stay on top of all things related to DNA testing so we are here to share a few new IRS decisions and some general policy information for your benefit.
In May of 2019, the IRS issued a private ruling to a taxpayer regarding the company 23andMe. This letter ruled that when the individual bought the DNA collection kit and upgraded to include the genetic testing, they could deduct a portion of the cost, but not the whole expense. The deductible portion was calculated to represent the cost of the genetic portion of the test because that is the part that is related to health. In general, a private letter ruling may not become tax law exactly as it played out in this one case, but it is expected to become part of the code so we will keep you updated!
It is important to notice that the IRS concluded that the DNA collection for ancestry is not deductible (nor is it eligible to be paid for by a personal Health Savings Account or Flexible Spending Account), but that that portion related to health purposes can be deducted and/or paid for with an FSA/HSA. If the test was purchased at the current (as of printing) rate of $199, just over $117 would be deductible in this one instance. As you can see it isn’t a straight formula of full cost minus the genetic add on, but a representation of the actual cost if it were purchased separately.
What implications this may have for DNA testing overall remains to be seen. You will likely want to ask your tax professional for guidance regarding whatever type of DNA testing you are looking at, but we here at Blue Star Diagnostics are happy to provide you with all the DNA testing news as it breaks. This is an exciting development and we will stay on top of it.
Many DNA tests are vital to securing your rights and many have significant quality of life implications including those related to personal health. That is why you want a reputable company with a real life, brick and mortar location to take care of any testing needs. Chain of custody companies like Blue Star Diagnostics are the only way to ensure you are protected.So, if you have any questions about DNA paternity testing we are just a click away. Please check out our services at https://bluestardiagnostics.com/dna/ or give us a call at (469) 656-7999. We are real people here to serve you in the real world!