Many homeowners are surprised to learn that certain home improvements made for medical necessity can qualify as deductible medical expenses. The IRS allows these deductions when modifications are essential for a taxpayer, spouse, or dependent’s health. In 2025, knowing the rules can help individual taxpayers reduce taxable income and maximize refunds.
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IRS Rules on Deductible Home Improvements
According to IRS Publication 502, home improvements for medical purposes are deductible if they are primarily for medical care and do not increase the home’s overall value. If they do add value, only the cost exceeding the increase in home value can be deducted.
Examples of Deductible Medical Home Improvements
- Installing wheelchair ramps and widening doorways.
- Adding handrails, grab bars, and support rails in bathrooms and hallways.
- Lowering cabinets and countertops for accessibility.
- Modifying stairways or installing lifts.
- Building entryways with medical access needs in mind.
Home Modifications That Add Value
If a modification improves both medical accessibility and increases property value, only the portion related to medical need is deductible. For example:
- Installing an elevator in a multi-story home may increase resale value—only the portion beyond the value added may be deducted.
- Remodeling a bathroom for accessibility may partially qualify if it adds equity.
Operating and Maintenance Costs
Beyond installation, maintenance and operating expenses of medically necessary equipment are also deductible. This includes:
- Repair costs for ramps, lifts, or medical equipment.
- Electricity for specialized medical systems installed in the home.
The 7.5% AGI Threshold Still Applies
Medical home improvement costs must exceed 7.5% of your Adjusted Gross Income (AGI) to be deductible in 2025. For example, if your AGI is $70,000, only expenses above $5,250 can be itemized as deductions.
Example Scenario
A taxpayer installs a wheelchair ramp for $12,000. A home appraisal shows the improvement increased property value by $4,000. The deductible medical expense is $8,000 ($12,000 – $4,000).
Documentation to Keep
- Doctor’s note prescribing the medical necessity.
- Receipts for labor, materials, and installation.
- Appraisal reports before and after improvements (if applicable).
Why It Matters in 2025
- Reduces taxable income: Helps families dealing with medical hardship.
- Boosts refunds: Larger deductions for those who itemize.
- Supports accessibility: Encourages proactive planning for medical needs at home.
Key Takeaways
- Only medically necessary home improvements qualify.
- If property value increases, only the excess cost is deductible.
- Operating and maintenance costs are also deductible.
- Keep thorough documentation to substantiate deductions.
