Do You Get a Refund for Medical Expenses Even If You Didn't Pay Any Taxes?

Once your medical bills top 7.5 percent of your income, you can deduct them.
i Images

Big medical bills are bad news, except when tax time rolls around. If you itemize deductions, you can often claim some of your medical bills as a tax deduction. Even if your medical expenses give you negative taxable income for the year, you can't turn that into a refund. The Health Coverage Tax Credit for medical costs is an exception.

The Medical Deduction

You can write off medical expenses for yourself, your spouse and your dependents, but you never get to claim all your medical bills. Review the IRS's list of qualified medical expenses, add them up for the year and then subtract any reimbursements you got from your insurer or a health savings account. Next, subtract 7.5 percent of your adjusted gross income. Any expenses you have left represent your medical deduction for the year.

Net Losses

You figure your adjusted gross income on your 1040, then subtract your itemized deductions and record the result on line 41 of the form. In some situations -- for example, if you run a business and it had a net operating loss for the year -- you can't get a bigger refund, but you can write off some of the loss next year. Unfortunately, however, medical deductions don't earn you a carryover: if part of your medical deductions exceed your income, you don't get to write them off, ever.

Health Coverage Tax Credit

If you qualify for the HCTC, you can get money back from the IRS, rather than just wiping out your tax bill. HCTC is available if you receive money from the federal Pension Benefit Guaranty Corporation. It also applies if you're covered by the Trade Adjustment Assistance Program, which retrains workers who lost jobs to foreign competition. If you buy health insurance for yourself or your family, the HCTC reimburses you for 72.5 percent of the cost when you file your taxes. You can receive the credit as a monthly payment instead.


If you're self-employed and disabled, you can deduct some of the costs of dealing with your disability at work. For example, if you're unable to hear, and you hire someone to interpret workplace conversations into sign language, you could claim that on Schedule C, where you report business expenses. If your work-related medical expenses put your business in the red, you can deduct the loss from any non-business income. It does not give you a tax credit, however.

the nest