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Learning Disorder Evaluations May Be Tax Deductible

It is hard for many families to afford the high cost of learning disability evaluations.  These can range from $3,400 to as much as $5000.  Well, there is good news for many families.  There has been a recent IRS ruling that says that these evaluations can be tax deductible as a medical expense. The Brain Clinic must first state a disclaimer:  Dr. Thomas  is neither an attorney nor an accountant.  He wrote this article as information for families with learning disabled children (or adults).  For more information, please check with the appropriate professional.

“Medical care” for the IRS includes expenses in diagnosis, cure, treatment, or prevention of disease 1.  Under that definition, diagnostic tools like learning disability evaluations may be covered.  The June 2005 Steve Leimberg Estate Planning Newsletter #836 advises that within the limits of the IRS Code Section 213, diagnostic expenses can qualify if the evaluation is to diagnose a medical condition. As many may know, dyslexia and any learning disability are defined by the American Psychiatric Association’s Diagnostic and Statistical Manuel, Fourth Edition (DSM-IV); therefore, these diagnoses are medical. To qualify for the deduction, a physician, or another qualified professional (such as a neuropsychologist,) is required to diagnose such a medical condition and recommend the appropriate treatment. After the diagnosis, the treatment provided for learning disabilities can also be covered as a deductible expense, as can related books and materials.

A learning disability means there is some learning function that is significantly below a person’s overall intelligence. Usually this means that reading speed is much slower than one would expect. Evaluations for these involve assessing cognitive functioning and achievement abilities in order to determine if there’s a discrepancy between overall intelligence and some achievement measure.  These discrepancies define the learning disability. For children, learning disabilities can slow down their progress at school if they’re not treated promptly and effectively. A full evaluation, provided by a qualified individual, and subsequent treatment can effectively help the child in dealing and working with the learning disability.

Affordability is a relevant and important issue when dealing with the evaluation and treatment of a learning disability. With this tax ruling and interpretation, the necessary expense to properly deal with the disability can be less of a burden for the parents.

Information regarding evaluations and treatment options for learning disabilities and attention deficit disorders can be found here. 

For more information regarding tax deductions for learning disability evaluations and treatment options, visit http://www.leimbergservices.com. The relevant citations for your accountant are noted below.

>1 IRC Sec. 213 ; IRC Sec 213 (d)(1)(A); Reg. Section 1.213-1(e)(1)(ii); Section 1.213-1(e)(1)(v)(a); Rev. Rul. 70-285, 1970-1 C.B. 52; Rev. Rul. 69-607, 1969-2 C.B. 40.

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