Washington, D.C. — U.S. Senators Susan Collins (R-ME), the Chairman of the Aging Committee, Maria Cantwell (D-WA), Martha McSally (R-AZ), and Kyrsten Sinema (D-AZ) sent a letter to Senate leadership urging them to extend the medical expense deduction in any end-of-year funding package.
Without action, millions of Americans with high medical costs will see a tax increase when they next file their taxes. The 2017 and 2018 threshold, which allowed for the deduction of medical expenses exceeding 7.5 percent of adjusted gross income (AGI), will give way to a threshold of 10 percent of AGI if an extension is not enacted
“This issue reflects strong bipartisan and bicameral consensus. None of us wants to see an increase in the tax burden for those with high medical expenses. This extension is low-cost but has an incredibly high impact,” the Senators wrote. “About 3.6 million taxpayers, including 1.4 million who are ages 65 and over, will benefit from the medical expense deduction remaining at the 7.5 percent income threshold. Moreover, over two-thirds fall into the middle sixty percent of the income distribution.”
“This deduction provides needed financial relief for Americans with high medical expenses, particularly seniors and individuals with disabilities or serious medical conditions,” the Senators continued. “As Congress works to complete action on a number of must-pass items before the end of the year, we urge you to extend the current medical expense deduction for future tax years.”
The medical expense deduction is vital for those who have pre-existing medical conditions, suffer chronic medical conditions, experience unexpected illnesses or injuries, or face costs for long-term care services that are not covered by insurance.
The support for this deduction is widespread in the medical community, including organizations such as the AARP, American Heart Association, National Association of Nutrition and Aging Services Programs, LeadingAge, Fight Colorectal Cancer, Medicare Rights Center, FORCE: Facing Our Risk of Cancer Empowered, Cystic Fibrosis Foundation, Triage Cancer, Family Voices, Well Spouse Association, American Health Care Association, National Center for Assisted Living, Autistic Self Advocacy Network, Paralyzed Veterans of America, and the Alliance for Aging Research. These groups have written a coalition letter in support of the 7.5 percent threshold.
Earlier this year, Senators Collins and Cantwell introduced the Medical Expense Savings Act, legislation that would provide financial relief for households that spend more than 7.5 percent of their income on medical expenses by allowing them to continue to deduct these costs from their tax bills.
Several years ago, the income threshold for taxpayers to deduct their medical expenses increased from 7.5 percent to 10 percent. In 2017, Senator Collins secured a provision to temporarily restore the income threshold for the medical expense deduction to 7.5 percent as part of the Tax Cuts and Jobs Act, but it expired at the end of 2018. Unless Congress takes action, taxpayers will only be able to deduct medical expenses that exceed 10 percent of their income then they file their 2019 taxes next year.
Click HERE to read the letter.