Medical Care Expense Deduction
Any taxpayer who files a New Mexico PIT-1 Personal Income Tax Return, including out-of-state residents with income tax responsibility to New Mexico, may claim a deduction for medical care expenses paid during the tax year for medical care of the taxpayer, the taxpayerÆs spouse or a dependent. Use the worksheet on page 21 to determine your deduction amount that you enter on line 13, Form PIT-1.
Important: To claim the medical care expense deduction, both lines 13 and 13a must be completed or any medical care expense deduction will be denied.
When medical expenses are incurred for services provided by a medical doctor, osteopathic physician, dentist, podiatrist, chiropractic physician or psychologist, the person providingthe service must be licensed or certified to practice in New Mexico or the medical expenses incurred cannot be included to compute the deduction for medical care expenses. For purposes of the Medical Care expense deduction, you may claim only unreimbursed and uncompensated medical expenses NOT included in your itemized deduction amount on the federal Form 1040 return, Schedule A. Medical care expenses not included in the itemized deduction amount because they are part of the federal 7.5% of adjusted gross income floor amount, can be included here.
NOTE: If you or your spouse is 65 years of age or older and you paid unreimbursed and uncompensated medical care expenses over $28,000 during the current tax year, you may also be eligible to claim an exemption of $3,000 and tax credit of $2,800. See the instructions for line 16, Schedule PIT-ADJ and line 23, Schedule PIT-RC for details.
Reimbursed and compensated insurance premiums like those paid with pre-tax dollars under cafeteria and similar benefit plans are also ineligible. Some of the expenses you may include are:
1. Amounts paid as premiums under Part B of Title XVIII of the Social Security Act (Medicare);
2. Amounts paid for a qualified long-term care insurance contract defined in Section 7702B(b) of the Internal Revenue Code, and
3. Unreimbursed insurance premiums and co-payments not deducted for federal purposes. NOTE: Premiums paid with pre-tax dollars through payroll deductions are not eligible.
For purposes of this deduction:
1. Health Care Facility means a hospital, outpatient facility, diagnostic and treatment center, rehabilitation center, free-standing hospice, physicianÆs office, or other similar facility, regardless of location, where medicalcare is provided and which is licensed by any governmental entity;
2. Medical Careö means the diagnosis, cure, mitigation, treatment or prevention of disease, or care for the purpose of affecting any structure or function of the body;
3. Medical Care Expensesö means amounts paid for:
a. The diagnosis, cure, mitigation, treatment or prevention of disease, or care for the purpose of affecting any structure or function of the body, if provided by a physician or in a health care facility. Cosmetic surgery is not eligible;
b. Prescribed drugs or insulin, and oxygen. A ôprescribed drugö is a drug or biologically active substance for use in or on humans that requires a prescription or administration by a person licensed to do so. Costs for over-the-counter drugs are not eligible. Prescribed drugs for animals are not eligible;
c. Qualified long-term care services as defined in Section 7702B (c) of the Internal Revenue Code;
d. Insurance covering medical care, including amounts you paid as premiums under part B of Title XVIII of the Social Security Act (Medicare) or for a qualified long-term care insurance contract defined in Section 7702B (b) of the Internal Revenue Code, if the insurance or other amount is income for the tax year;
e. Nursing services, regardless of where the services are rendered, if provided by a practical nurse or a professional nurse licensed to practice
in the state according to the Nursing Practice Act; f. Specialized treatment or the use of special therapeutic devices if a physician prescribes the treatment or device, and the patient can show that the expense was incurred primarily for the prevention or alleviation of a physical or mental defect or illness. “Special therapeutic devices” include corrective eyeglasses, contact lenses and hearing aids prescribed by a physician. Expenses for guide dogs, however, are excluded;
g. Care in an institution other than a hospital, such as a sanitarium or rest home, if the principal reason for the presence of the person in the institution
is to receive the medical care available. If the meals and lodging are a necessary part of such care, the cost of the medical care expenses.”
4. “Physician” means a medical doctor, osteopathic physician, dentist, podiatrist, chiropractic physician or psychologist licensed or certified to practice in New Mexico. Physicians licensed or certified to practice in New Mexico are recognized. Also qualified are licensed practical nurses and registered professional nurses licensed in New Mexico. Costs of care provided by other health care professionals such as physical therapists, acupuncturists and others licensed by the New Mexico Department of Health are deductible only if the care was provided in their offices or at other qualified health care facilities. Keep full documentation of all medical care expenses for which you claim a deduction on this line. Do not send the documentation with your tax return. Keep your receipts in case you are selected for audit or verification of deductions claimed. Married couples filing separately may claim only those expenses personally
incurred. They may not claim any expenses the spouse has already claimed or plans to claim. Do not claim payments to a veterinarian or veterinary clinic or any other expenses for family pets or other animals. You may claim the medical care expense deduction in an amount equal to the percentage of medical care expenses paid during the tax year based on the filing status and adjusted gross income. See the chart on page 22.