Dateline: 04/04/02 

Recognizing obesity as a disease, the IRS has issued a ruling under which expenses for certain weight-loss programs may qualify as medical deductions on individuals' federal income tax returns. Diet foods, however, are not deductible. Grab a snack and don your thinking cap, because here comes the rules.

Must be medically prescribed
Under the IRS ruling, taxpayers who have been diagnosed as obese or otherwise suffering from a disease for weight-loss is a medically prescribed treatment may deduct associated medical expenses not paid by insurance only to the extent the total of such expenses exceeds 7.5 percent of their adjusted gross income.

IRS gives examples of two taxpayers participating in weight-loss programs. They paid fees to join the programs and to attend periodic meetings and purchased diet plans and booklets. One was diagnosed by a doctor as obese, the other as suffering from hypertension. Both participated in the programs as a treatment for their medically diagnosed diseases. The costs related to their weight-loss programs would be deductible for these taxpayers, to the extent not reimbursed by insurance or other sources.

Taxpayers who participate in weight loss programs to improve their appearance or general health may not deduct expenses associated with those programs.

Diet foods are not deductible
The cost of diet foods -- including foods associated with a medically prescribed diet plan -- is not deductible. The IRS considers diet foods to be substitutes for the food taxpayers would normally eat and, thus, not deductible medical expenses, even for taxpayers whose disease qualifies them to deduct other non-food costs of the weight loss program.

Applies to prior years, as well
The new rule applies not only to 2001 tax returns being filed this year, but also to any years for which taxpayers may file amended returns. Generally, a person may amend a return for three years after the due date. Thus, a taxpayer who did not have an extension to file would have until April 15, 2002, to amend a 1998 return. 

When available, the ruling, Rev. Rul. 2002-19, will be available soon on the IRS Web site at http://www.irs.gov. The ruling will be published as Internal Revenue Bulletin 2002- 16, and will be found on the Revenue Bulletins page at http://www.irs.gov/bus_info/bullet.html.

SOURCE: Internal Revenue Service