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How Being a Quitter May Result in a Tax Deduction
December 3, 2016
Nearly 7 in 10 U.S. smokers want to quit, according to the Centers for Disease Control. However, it’s not always that easy. You may have made a New Year’s Resolution to stop smoking this year, but we also know that nearly 80 percent of all resolutions are broken. So, if that resolution you made on Jan. 1 isn’t enough to keep you motivated, what will? Perhaps a tax credit?
That’s right! The Internal Revenue Service may just be the encouragement you need to finally kick the bad habit.
Here’s what you need to know:
Who counts as a tobacco user?
Under the Affordable Care Act, you cannot be denied coverage for being a smoker now or in the past. However, smoking cessation therapy is covered by all plans sold after Sept. 23, 2010, at no out-of-pocket cost. Reporting yourself as a smoker is completely up to you and based on the honor system.
In general, anyone who has used tobacco four or more days a week for the past six months is considered a smoker. If you’re already in the process of quitting, only smoke occasionally, or use tobacco for ceremonies, you may not qualify. Under the ACA, tobacco users may be charged up to 50 percent more than non-tobacco users in monthly premiums for insurance plans sold on government-run marketplaces.
What types of therapy are covered? If you choose to opt-in as a tobacco user on an ACA plan, you should realize that every plan is different so the types of coverage and amounts may vary. However, smoking cessation therapy and medication coverage is required under the ACA.
These include, but aren’t limited to:
Cessation medications, such as inhalers, gum, and/or drugs
What if I don’t have health insurance, my health insurance doesn’t cover everything, or I don’t opt-in as a tobacco user? Even if you don’t have health insurance or don’t opt-in as a tobacco user on a marketplace plan, you can still access smoking cessation resources and receive a deduction. The IRS allows deductions for “participation in a smoking-cessation program and for drugs to alleviate nicotine withdrawal that require a prescription.”
These resources can be deducted even if you’re healthy and haven’t been diagnosed with a specific disease. You don’t need your doctor’s approval; however, you will need a prescription for any drugs that alleviate symptoms (non-prescription nicotine gum or patches aren’t deductible).
Where can I learn more about smoking cessation resources? If you’re interested in learning more about smoking cessation resources, visit https://smokefree.gov to receive tips and tricks, information on quitting methods, daily challenges, 24/7 support and more.