For New York residents with substantial unreimbursed medical expenses, properly filing Form IT‑196 (Itemized Deductions) can unlock significant tax savings. In tax year 2025, New York closely aligns with federal rules on medical deductions—applying the familiar 7.5% of AGI threshold to your medical spending. This comprehensive guide demystifies how to navigate Form IT‑196, calculate eligible amounts, and maximize your deduction.
📘 Understanding the Basics
Form IT‑196 is the gateway to itemizing deductions on your New York tax return (Form IT‑201). To use it for medical expenses in 2025, you must:
- File federal Schedule A and itemize deductions, including medical expenses.
- Transfer those expenses to IT‑196, aligning your New York medical deduction with federal guidelines.
- Ensure total itemized deductions are greater than the New York standard deduction.
✅ Calculating Qualifying Medical Expenses
Follow these steps to determine your medical deduction:
- Compute your total unreimbursed qualifying medical expenses on federal Schedule A.
- Subtract 7.5% of your federal AGI—this is your deductible medical amount.
- Report that figure on IT‑196, Line 1, matching the federal amount.
🔍 What Counts as Qualifying Medical Expenses
New York considers the same costs as the IRS when determining medical deductions for IT‑196:
- Doctor, dentist, psychiatrist, and specialist fees
- Hospital care, surgeries, lab tests, and X‑rays
- Prescription medications and insulin
- Vision and dental treatments (eyeglasses, implants, braces)
- Nursing or long‑term care expenses if medically necessary
- Medical equipment and mobility devices (e.g., wheelchairs)
- Transport—mileage, tolls, and parking for medical appointments
🚫 What Does Not Qualify for Deduction
Expenses not eligible include:
- Over-the-counter remedies (unless prescribed)
- Cosmetic procedures without medical necessity
- Gym memberships, wellness programs
- Insurance premiums reimbursed by pre-tax accounts
🗂 How to Enter Medical Deductions on Form IT‑196
- Complete federal Schedule A first.
- Transfer your medical deduction (line 4 of Schedule A) to line 1 of IT‑196.
- Include other itemized deductions on IT‑196, such as taxes, mortgage interest, charitable gifts.
- Total all lines on IT‑196 and transfer to Form IT‑201, Line 34.
📉 Standard Deduction vs. Itemizing
For 2025, New York’s standard deduction is:
- Single filers: $8,000
- Married filing jointly: $16,050
- Head of household: $11,200
Only opt to itemize if your total deductions—including medical—exceed these thresholds.
🧾 Recordkeeping and Audit Protection
Keep the following documentation to support your medical deductions:
- Detailed receipts and hospital/doctor bills
- Insurance EOBs showing unreimbursed portions
- Proof of payment (checks, statements)
- Mileage logs with date, purpose, and mileage records
- Prescriptions or doctor’s notes for medically necessary items
🧠 Strategic Tips
- Bunch Expenses: Combine treatments or devices into one calendar year to exceed the 7.5% threshold.
- Track Travel: Use IRS mileage rates (e.g., 22¢ per mile in 2025).
- Time Purchases: Prepay December bills if it helps reach the threshold.
- Evaluate Regularly: Itemize every year to determine if it beats the standard deduction.
📊 Sample Scenario
AGI: $90,000
Total Medical Expenses: $10,800
Federal Deductible Amount: $4,050 (10,800 – 7,500)
NYS Itemized Deduction: $4,050 reported on IT‑196
Assuming total itemized deductions surpass $16,050, itemizing would reduce your New York taxable income compared to taking the standard deduction.
📅 Final Thoughts
Form IT‑196 is essential if you plan to itemize medical deductions on your New York return in 2025. Accurately calculating your qualifying expenses, maintaining solid documentation, and comparing your total itemized deductions against the standard deduction will determine whether the effort is worthwhile. If you have large out-of-pocket medical costs, consulting a tax professional or exploring tax software may help ensure you claim every eligible deduction with confidence.
