Summary

Allows certain payments for physical activity, fitness, and exercise — such as gym memberships, instruction, equipment, and instructional materials — to be treated as medical care for federal tax purposes, subject to annual limits and rules. The change defines what counts as a qualifying fitness facility and places limits on equipment and apparel that qualify; it applies to taxable years beginning after the law is enacted.

Key Points

• Certain payments for gym memberships, instruction, equipment, and instructional materials may be treated as medical care for federal tax purposes.
• The law sets annual limits on how much of these fitness-related expenses can be claimed as medical care.
• It defines what qualifies as a fitness facility and narrows which equipment and apparel count as medical expenses.
• Qualifying amounts are subject to existing tax rules that apply to medical-care expenses (e.g., itemized medical expense benefits).
• Changes apply to taxable years beginning after the law takes effect; taxpayers will need documentation to support claims.
• The stated goal is to promote healthier lifestyles and reduce diseases linked to overweight and obesity by using tax incentives.
• The IRS will need to issue guidance and adjust administration to implement definitions, limits, and documentation requirements.
• Potential federal revenue loss from allowing these expenses as medical care, offset by potential public-health benefits over time.

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