I took out a loan from a "medical lending" company in 2015 and paid it off later that year. All of the loan went to pay for necessary medical expenses (paid directly from the lending company to the doctors and pharmacies) and I will be itemizing the full amount of the principle on my schedule A.

My question is, can the fees and/or interest I paid on the loan be considered part of the qualified medical expenses?

I read IRS Topic 502 about what constitutes deductible medical expenses, but it does not mention financing. If possible I would like confirmation of the answer in an IRS publication or other official source.

1 Answer 1


IRS Publication 502:

Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.

Loan interest and fees do not meet this definition. Your loan interest and fees are a cost of the payment method you chose (a loan), not a cost of medical treatment.

The IRS makes clear where loan interest is deductible. Publication 936 discusses home mortgage interest deductions, and Publication 970 specifically discusses student loan interest deductions.

Considering Publication 502's definition of a medical expense, combined with the absence of a publication discussing medical expense loan interest deductions, one must conclude that medical loan interest and fees are not deductible.

  • 2
    The paragraph you quoted goes on to include "legal medical services" as well as "costs" of equipment, supplies, diagnostic devices, transportation, and even insurance. Financing is often included in cost calculations elsewhere. While the omission of interest here is suggestive, I would prefer a more definitive answer if possible.
    – Robert
    Feb 4, 2016 at 19:44
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    The IRS does not maintain a comprehensive list of "things you cannot deduct." If an expense is not specifically mentioned, then it is not deductible. The references I've found are the most definitive you can get without asking the IRS directly. I think my answer is unambiguous, just not the one you want to hear.
    – Jesse
    Feb 4, 2016 at 19:52
  • +1 agreed, Jesse, it doesn't look like an oversight to me, either Feb 4, 2016 at 20:06
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    @Jesse I think your answer is probably correct and it is not the least big ambiguous, but I would prefer something more strongly supported than opinion if possible.
    – Robert
    Feb 4, 2016 at 22:49

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