OTC for specific medical condition

From

Joe

OTC For tax year 2010: Not a qualified medical expense for Schedule A. Is a qualified medical expense for reimbursements from an HSA, MSA & FSA and does not have to be prescribed by a physician.

For tax year 2011: Not a qualified medical expense for Schedule A. Is a qualified medical expense for HSAs, MSAs & FSAs if prescribed by a physician.

For those of you who want the technical stuff.... IRS Guidance for tax years after 2010 is at:

Publication 502 says

Nutritional Supplements

You cannot include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, ?natural medicines,? etc. unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, these items are taken to maintain your ordinary good health, and are not for medical care.

Does publication 502 explicitly ban OTC medicines?

The paragraph you quote would seem to say that if you doctor tells you to take saw palmetto for prostate, or fish oil for cardiopulmonary health, and you've been diagnosed with such a condition, that it WOULD be deductible even though it's OTC. There seems to be other language disallowing it. Confusing.

Section 213 says of the IRC says

(b) Limitation with respect to medicine and drugs An amount paid during the taxable year for medicine or a drug shall be taken into account under subsection (a) only if such medicine or drug is a prescribed drug or is insulin.

(3) Prescribed drug.? The term "prescribed drug" means a drug or biological which requires a prescription of a physician for its use by an individual.

The above language seems to disallow OTC drugs. Then again, publication 502 says nutritional supplements are OK if they are for a specific medical condition. On various websites I read that OTC vitamin D is more effective than prescription vitamin D. Not sure if that's true, but I found out I have vitamin D deficiency and am using the OTC stuff.

So if publication 502 allows OTC nutritional supplements, then why not OTC medicines, like motirin instead of prescription valium.

That special rule in publication 502 maybe comes from a court case or treasury regulation.

The Code differentiates drugs from medicine. OTC drugs are disallowed as they do not require a doctor's Rx. Nutritional supplements are not drugs. As such, if properly ordered to treat a medical condition they are deductible.

The prostate condition must have been diagnosed, perhaps through a PSA blood test or digital exam.

And a blood test showing anemia would allow a deduction for prescribed iron, a nutritional supplement, not a prescribed medicine.

I'm guessing Advil would be classified as a drug or medicine and not as a nutritional supplement.

Where in section 213 is this distinction?

Sorry, I meant the regulation (§ 1.213-1(e)(2)).

(2) Medicine and drugs. The term medicine and drugs shall include only items which are legally procured and which are generally accepted as falling within the category of medicine and drugs (whether or not requiring a prescription). Such term shall not include toiletries or similar preparations (such as toothpaste, shaving lotion, shaving cream, etc.) nor shall it include cosmetics (such as face creams, deodorants, hand lotions, etc., or any similar preparation used for ordinary cosmetic purposes) or sundry items. Amounts expended for items which, under this subparagraph, are excluded from the term medicine and drugs shall not constitute amounts expended for ?medical care?.

I have to conclude that certain items are categorized as drugs and other items (not excluded above as toiletries or cosmetics) are considered a medicine.

In code section 213(b) it says a "medicine or a drug shall be taken into account under subsection (a) only if such medicine or drug is a prescribed drug or is insulin."

Under 213(d)(3) it tells us:

"The term ?prescribed drug? means a drug or biological which requires a prescription of a physician for its use by an individual."

It doesn't say a medicine or drug which requires a prescription.

I have always interpreted all of this to mean that there are going to be certain "preparations" that do not require having a written prescription that can only be filled by a pharmacist. And that these "preparations" when ordered by a physician to treat a specific medical condition would be deductible.

So far so good.

So where do you get the idea that "medicine" that's not a "drug" is deductible even if it's not prescribed or insulin?

No, but "prescribed drug" means "medicine" OR "drug" under the portion of §213(b) you quoted.

Based on what you've quoted, I have to disagree.

(1) My question was where in the code does it differentiate between medicine and drugs? The above paragraph does not seem to answer it. The above paragraph differentiates between medicine/drugs and cosmetics.

(2) The term "generally accepted as falling within the category of medicine and drugs" seems to include both prescription valium and OTC tylenol, as to an ordinary person both of these items are medicines and/or drugs. They're synonyms, at least in the US. In the country I was born in, drugs refer to the illegal stuff (pot, cocaine, etc) whereas medicines refer to OTC and prescription medicines. But not so here.

(3) As an aside, accepted by who? The state of CA accepts marijuana as a medicine for treating a host of diseases. It seems people are getting prescriptions for backache and stress, which is an abuse of the term medical use according to me. So the above regulation seems to allow medical marijuana as a deduction for medical expenses, and in CA it is "legally procured".

supplements if it is prescribed by a doctor for a specific deficiency (such as vitamin D for very low vitamin D levels). I see OTC medicines as the evil twin of nutritional supplements. As long as it's for a specific condition, then I think the OTC medicines/drugs should be deductible, unless there regulation prohibiting it, and the one quoted above does not cut it for me.

Yeah, because they're synonyms.