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Deducting health club membership fees

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  • Deducting health club membership fees

    Can a company reimburse health club premiums to an employee without having it appear as additional taxable income under ACA?

    I've been trying to find out whether it's possible to deduct health club membership fees (or at least make them tax deductible through company reimbursement or having the company pay them directly). It's pretty difficult to Google since the simple answer is "NO" for individuals without special circumstances (medical conditions, doctors note, etc). That's not what I'm asking about.

    Many private companies, local governments and health insurance companies provide partial reimbursements of the monthly dues as part of a company wide wellness program. There's usually some minor steps for compliance, but nothing too burdensome. Since I have a single owner/employee corporation, the plan could reimburse up to 100% of OOP expense for the health club dues similar to how our existing MERP works for medical expenses.

    However, I can't find any straightforward references on setting up such a wellness plan and whether those reimbursements are deductible to the business.



  • #2
    We allow up to $25/mo for health club membership. It is paid by our office and (according to our research) must be added to employees' W2 taxable income - FICA, federal, and state. I believe that's the best you can do although I'll be happy to be proven wrong.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      Thanks, Joanne.

      So far the score is 3 CPAs against and 0 for. ;-)

      I'd actually qualify for the personal deduction, but exceeding 10% of AGI makes it pointless. That's why the interest in finding a biz deduction.


      • #4
        If it is prescribed for a specific medical condition, then it may be payable out of an HSA, which would be pre-tax.
        Helping those who wear the white coat get a fair shake on Wall Street since 2011


        • #5
          Actually, I was thinking about that after replying to Joanne. You're almost certainly right about that.

          All the other post-op stuff I've done qualifies (PT, dry needling, massage). I just don't have the equipment at home for more advanced rehab.