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Is Transition-Related Medical Expenses Tax Deductable in S.A.? |
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A US Tax Court recently ruled that a transgender woman’s medical expenses for hormone therapy and sex-reassignment surgery were medically necessary and therefore tax deductible under Federal Law.
The court as well as the American Medical Association and the American Psychological Association recognised that transition related health care is non-cosmetic but medically necessary health care.
The ruling follows a case stemming from a decision by the US Internal Revenue Service to reject Rhianon O’Donnabhain’s deductions of her expenses for sex reassignment surgery in 2001 from her federal income tax.
In his judgement, Judge Gale held that O’Donnabhain’s  Gender identity Disorder “is a disease” and that hormone therapy and sex reassignment surgery were “for the ... treatment of “ the disease and not cosmetic surgery” which is excluded from the definition of medical care. However, O’Donnabhain’s breast augmentation surgery was “directed at improving ... [her] appearance” and is thus considered cosmetic surgery and is excluded from the definition of deductible medical care.
Executive Director of the National Center for Transgender Equality welcomed the decision saying, “Finally we have recognition from the courts ... that transition-related care is absolutely necessary health care for the well-being of many transgender people.” She added that being able to deduct a portion of costly medical treatments will make it more affordable for transgender people to follow through with the care their doctors prescribe. “For the IRS to treat transgender people and non-transgender people differently was discrimination, plain and simple, and now that has ended.”
However, Madelein W wrote on the Gender DynamiX forum, and Justine Howard agreed with her that “the judge and his judgement merely show the ongoing bigotry. [It} was not a considered legal argument that he delivered but merely a biased personal viewpoint.”
According to South African tax laws set out in the Comprehensive Guide as issued by the South African Revenue Service, all medical treatments not recoverable from medical aid should be tax-deductible, whether surgery takes place inside or outside the country. At the time of going to press, SARS had not yet replied to the e-mail enquiring whether transition-related medical treatment was in fact tax-deductible.
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