OLR RESEARCH REPORT
November 4, 2008 2008-R-0591
STATE INCOME TAX DEDUCTIONS FOR MEDICAL EXPENSES
By: Judith Lohman, Chief Analyst
You asked which states have state income tax deductions for medical
expenses and what the deductions are.
The information in this report is based on a summary by the
Wisconsin Legislative Fiscal Bureau of Individual Income Tax Provisions
in the States (Informational Paper 4, January 2007). Since the Wisconsin
report applies to the 2005 tax year, we updated the information by
surveying state income tax forms and instructions for the 2007 tax year.
Forty-one states and the District of Columbia have broad-based state
personal income taxes. Of these, 35 allow taxpayers to deduct qualified
medical expenses when calculating tax liability. Seven, including
Connecticut, do not. Of the 35 states that have medical expense
deductions, 20 have the same deduction allowed under the federal tax
law and 15 have state deductions that vary from the federal deduction in
one or more respects.
FEDERAL TAX DEDUCTION FOR MEDICAL EXPENSES
When calculating federal taxable income, a taxpayer may deduct
eligible, unreimbursed medical and dental expenses that exceed 7.5% of
the taxpayer’s federal adjusted gross income (AGI). Deductible expenses
include insurance premiums for medical and dental care other than
premiums already deducted under the self-employed health insurance
Mary M. Janicki, Director Room 5300
Phone (860) 240-8400 Legislative Office Building
FAX (860) 240-8881 Connecticut General Assembly Hartford, CT 06106-1591
http://www.cga.ct.gov/olr Office of Legislative Research Olr@cga.ct.gov
deduction. Deductible long-term care insurance premiums are limited
based on age. The limits for 2007 were:
Age Deduction Limit
40 or under $ 290
41 to 50 550
51 to 60 1,110
61 to 70 2,950
71 and over 3,680
The limits apply to premiums for each person. The long-term care
policy must also meet certain minimum standards.
STATE TAX DEDUCTIONS FOR MEDICAL EXPENSES
Thirty-four states and the District of Columbia have medical expense
deductions in their state income taxes. Seven states do not. The
remaining nine states have no broad-based state income taxes.
Of the states with medical expense deductions, 20 use the federal
deduction with no change and 15 deviate from the federal deduction in
certain respects. The most common differences are to (1) allow
additional expenses to be deducted, (2) base the 7.5% exclusion on state
rather than federal AGI, or (3) provide a 100% deduction or separate
credit for qualifying long-term care insurance premiums. State
deductions generally use federal definitions for determining which
expenses are deductible.
Table 1 shows how each state treated medical expenses for purposes
of its income tax in the 2007 tax year.
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Table 1: State Income Tax Deductions for Medical Expenses
2007 Tax Year
(* = states with long-term care insurance tax credits)
State Medical Expense Deduction
Alabama Expenses exceeding 4% of AGI (long-term care premiums are fully
Alaska No state income tax
Arizona 100% of medical expenses
Arkansas Same as federal
California Same as federal except medical expenses paid on behalf of a domestic
partner are deductible.
Colorado* Same as federal
Delaware Same as federal
District of Same as federal
Florida No state income tax
Georgia Same as federal
Hawaii Expenses exceeding 7.5% of Hawaii AGI.
Idaho Same as federal
Iowa Same as federal except subtract expenses for the purchase of health
benefits coverage or insurance if those expenses are exempted in
determining Iowa net income.
Kansas Same as federal
Kentucky Expenses exceeding 7.5% of Kentucky AGI
Maine Same as federal
Maryland* Same as federal
Massachusetts Expenses exceeding 7.5% of Massachusetts AGI
Minnesota* Same as federal
Mississippi Same as federal
Missouri Same as federal
Montana Expenses exceeding 7.5% of Montana AGI
Nebraska Same as federal
Nevada No state income tax
New Hampshire Income tax limited to interest and dividends only
New Jersey Expenses exceeding 2% of New Jersey AGI
New Mexico 100% of medical expenses. Medical expenses for services provided by
a medical doctor, osteopath, dentist, podiatrist, chiropractic
physician, or psychologist must be provided by a person licensed or
certified to practice in New Mexico. Taxpayers or spouses aged 65 or
over who pay unreimbursed and uncompensated medical care
expenses of $28,000 or more during tax year 2007 may claim an
exemption of $3,000.
New York* Same as federal except subtract amount paid for long-term care
insurance premiums from medical expense total.
North Carolina Same as federal
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State Medical Expense Deduction
North Dakota 100% of medical expenses. In addition, the state allows a credit for
qualified expenses for caring for a family member who is at least 65
years old or disabled and related to the taxpayer by blood or marriage.
The family member claiming the credit must have an annual taxable
income of no more than $15,000 if single or $30,000 if married,
including the income of the member's spouse. A taxpayer whose taxable
income is under $25,000 may claim 30% of qualified expenses.
Taxpayers who earn more than $25,000 can claim the greater of 20% of
the qualified care expenses or 30% of the expenses, less 1% of the
expenses for each $2,000 or fraction thereof by which the taxpayer's
taxable income exceeds $25,000. The credit is reduced by $1 for each
$1 of taxable income that a taxpayer earns over $50,000 and is limited
to $2,000 per family member per year or $4,000 for two or more family
members. The credit is nonrefundable, may be prorated among several
taxpayers, and may not be claimed as a carryback or carryforward.
Ohio Same as federal except 100% of long-term care insurance premiums
Oklahoma Same as federal
Oregon* Same as federal, except taxpayers age 62 or over by the end of the tax
year may exclude 100% of medical expenses.
Rhode Island Same as federal
South Same as federal
South No state income tax
Tennessee Income tax limited to interest and dividends only
Texas No state income tax
Utah Same as federal except 100% of long-term care insurance premiums
Vermont Same as federal
Virginia Same as federal
Washington No state income tax
West Virginia None
Wisconsin Same as federal
Wyoming No state income tax
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