You may deduct your payment of medical bills for your children or other dependents, subject to the AGI floor (17.1). You may deduct the expenses of a person who was your dependent (21.1) either at the time the medical services were provided or at the time you paid the expenses.
In determining dependent status for medical expense purposes, some of the regular exemption tests for dependents (21.1) can be disregarded. If you are unable to claim someone as your dependent for one of the following reasons, you may deduct your payment of medical costs on their behalf: (1) the person is your child who is claimed as a dependent by the other parent under the special rules (21.7) for divorced/separated parents; see below, (2) the person has gross income exceeding the limit for qualifying relatives ($3,800 for 2012), (3) the person files a joint return with their spouse, or (4) you are the dependent of another taxpayer and thus are barred from claiming any dependents on your return. Such a qualifying person must be a U.S. citizen or national, or a resident of the United States, Canada, or Mexico, unless he or she is an adopted child who lives with you. See Examples 1–3 below. A child may not deduct medical expenses paid with his or her parent’s welfare payments; see Example 4 below.
You may be able to deduct your payment of your child’s medical costs, even though your ex-spouse is entitled to claim the child as a dependent (21.7). For purposes of a 2012 medical deduction, the child is considered to be the dependent of both you and the child’s other parent if (1)you are divorced or legally separated under a court agreement, separated under a written agreement, or married but living apart during the last six months of 2012; (2) the child was in the custody of one or both of you for more than half of 2012; and (3) together you provided more than half of the child’s 2012 support.
You may deduct medical expenses of an adopted child if you may claim the child as a dependent either when the medical services are rendered or when you pay the expenses. An adopted child is treated as your child for dependent purposes when a court has approved the adoption or the child is lawfully placed with you for legal adoption.
If you reimburse an adoption agency for medical expenses it paid under an agreement with you, you are considered to have paid the expenses. But if the reimbusement is for medical services that were provided and paid for before you began your adoption negotiations, you may not deduct your payment.
You may not deduct medical expenses for services rendered to the natural mother of the child you adopt.
If you may claim a person as your dependent under a multiple support agreement (21.6), your unreimbursed payments of that person’s medical expenses are deductible. Even if you may not claim the dependent exception for 2012 because the person has a gross income of $3,800 or more, you may still deduct your payment of medical expenses provided the other multiple support agreement tests are met.
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