IRS Out-of-Pocket Health Care Standard 2026

• What the IRS Out-of-Pocket Health Care Standard Covers in 2026
  • What Qualifies as an Out-of-Pocket Health Care Expense
  • What Is Excluded From the Standard
• Dietary Restrictions and Special Diet Costs: A Gray Area Worth Understanding
• How This Standard Factors Into Your IRS Case
  • Offers in Compromise
  • Installment Agreements
  • Currently Not Collectible Status
• When the Standard Amount Isn't Enough
• Frequently Asked Questions

When the IRS evaluates your ability to pay a tax debt, it doesn't simply take your word for what you spend each month. Instead, it applies a set of fixed allowances called National Standards to determine how much of your income is genuinely unavailable for repayment. One of those allowances covers out-of-pocket health care costs, and understanding how it works can make a real difference in your case.

The IRS national standards out-of-pocket health care allowance is a monthly figure the IRS accepts for medical expenses without requiring you to document every receipt. If your actual costs are higher, you may be able to argue for more, but you'll need to substantiate it. If your costs are lower, the IRS still applies the standard amount in your favor.

This article covers the 2026 figures, what qualifies as a covered expense, what doesn't, and how the standard affects your payment plan, offer in compromise, or currently not collectible determination.

What the IRS Out-of-Pocket Health Care Standard Covers in 2026

The IRS sets two monthly allowance figures for out-of-pocket health care, based on age:

• Under age 65: $90 per person per month
• Age 65 and older: $163 per person per month

These figures come from IRS guidance aligned with data published by the U.S. Trustee Program. They apply per person in your household, so a family of four with all members under 65 would receive a combined allowance of $360 per month.

The standard is meant to cover routine, predictable health care spending. The IRS treats it as a floor, even if you spend less than this amount, the allowance still counts in your favor when your ability to pay is calculated.

What Qualifies as an Out-of-Pocket Health Care Expense

The standard covers necessary, non-reimbursed medical costs. That includes:

• Medical services: Doctor visits, urgent care, lab work, physical therapy, and similar services you pay for out of pocket after insurance
• Prescription drugs: Any medications prescribed by a licensed provider
• Medical supplies: Eyeglasses, contact lenses, hearing aids, bandages, and other items required for ongoing health maintenance
• Dental and vision care: Routine cleanings, fillings, eye exams, and comparable preventive or maintenance services

The common thread is necessity. The IRS is focused on costs tied to maintaining your health, not elective or cosmetic improvements.

What Is Excluded From the Standard

Not every health-related expense qualifies. The IRS excludes:

• Elective or cosmetic procedures: Anything that isn't medically required
• Over-the-counter wellness products: Vitamins, supplements, and general wellness items that aren't prescribed or medically necessary
• Health insurance premiums: These fall under the IRS's Other Necessary Expenses category, they're handled separately from the out-of-pocket health care standard
• Gym memberships or fitness programs: Even when a doctor recommends them, these typically don't qualify under this standard

Whether a specific expense falls inside or outside the standard matters most when you're trying to argue for an allowance above the standard amount.

Dietary Restrictions and Special Diet Costs: A Gray Area Worth Understanding

One of the most common questions people have is whether special dietary needs count as a medical expense under the IRS standard. The short answer: not automatically, but sometimes.

Food costs aren't part of the out-of-pocket health care standard, even for specialized diets. However, if you have a documented medical condition that requires a specific diet, celiac disease, phenylketonuria, or a physician-directed therapeutic diet, for example,  you may be able to argue that the incremental cost above what you'd otherwise spend on food qualifies as a necessary expense beyond the standard allowance.

This isn't a simple or automatic process. To make that argument successfully, you'd need to:

1. Provide documentation from a licensed medical provider confirming both the condition and the dietary requirement
2. Show the actual incremental cost, the difference between what a standard diet would cost and what your medically required diet costs
3. Present this to a revenue officer as a substantiated expense that exceeds the standard

Revenue officers have discretion in how they evaluate these claims. Without clear documentation and a reasonable cost calculation, the argument is unlikely to hold up. This is exactly the kind of situation where professional representation can prevent a legitimate claim from being dismissed because it wasn't presented correctly.

How This Standard Factors Into Your IRS Case

The out-of-pocket health care standard is one piece of a larger picture. To see how all the National Standards interact, the IRS National Standards 2026 complete breakdown by category is a useful starting point for understanding where health care fits alongside housing, food, transportation, and other allowances.

Offers in Compromise

When you submit an offer in compromise, the IRS calculates your Reasonable Collection Potential, essentially the maximum it expects to collect from you. Your allowable monthly expenses, including the health care standard, reduce your disposable income figure. A lower disposable income means a lower offer amount. Applying the correct health care allowance for each household member, and documenting any costs above the standard, directly affects how low your offer can go.

Installment Agreements

In a standard installment agreement, the IRS uses your allowable expenses to determine what you can afford to pay each month. The health care standard reduces the income available for repayment. If your actual health care costs are significantly higher than the standard and you can document them, arguing for an above-standard allowance may lower your monthly payment.

Currently Not Collectible Status

The IRS grants currently not collectible status when your allowable expenses equal or exceed your income, leaving nothing available for repayment. The health care standard contributes directly to that calculation. For people with high medical costs — particularly those over 65 or managing chronic conditions, this allowance can be the deciding factor. For more detail on how National Standards affect these determinations, see the IRS National Standards 2026 guide on offers in compromise and payment plans.

When the Standard Amount Isn't Enough

The IRS does allow taxpayers to claim expenses above the standard when those expenses are documented and necessary. This is where many people run into trouble on their own.

A revenue officer won't accept a higher number just because you say your costs are higher. You need receipts, medical records, prescriptions, and a clear explanation of why the expense is necessary and non-discretionary. Incomplete documentation or an unclear presentation can result in the additional amount being disallowed entirely.

This matters most when the gap between the standard allowance and your actual costs is large enough to change the outcome of your case, whether that's the amount of an offer in compromise, the size of a monthly installment payment, or eligibility for currently not collectible status.

Working with a tax attorney who understands how revenue officers evaluate these claims gives you the best chance of having legitimate above-standard expenses recognized. At Wolf Tax, a licensed tax attorney with over 15 years of experience handles IRS negotiations directly, including cases where documented health care costs exceed the standard allowance.

If your medical expenses are higher than what the IRS standard allows, or if you have a dietary restriction tied to a medical condition and want to know whether it can be argued as a necessary expense, a free consultation is the right place to start. Learn more at wolftax.com.

Frequently Asked Questions

What is the IRS out-of-pocket health care standard for 2026?
The IRS allows $90 per month per person under age 65 and $163 per month per person age 65 or older for out-of-pocket health care costs. These figures apply per household member and don't require documentation unless you're claiming above-standard amounts.

Does the IRS health care standard include health insurance premiums?
No. The IRS treats health insurance premiums as a separate necessary expense under a different category. The out-of-pocket health care standard covers costs like copays, prescriptions, and medical supplies, not premiums.

Can I claim more than the standard health care allowance?
Yes, but only with documentation. If your actual out-of-pocket health care costs exceed the standard, you can argue for a higher allowance by providing receipts, medical records, and a clear explanation of why the costs are necessary. A revenue officer makes the final determination.

Do special dietary costs count as a medical expense under IRS standards?
Not automatically. Food costs aren't part of the out-of-pocket health care standard. However, if you have a documented medical condition that requires a specific diet, you may be able to argue that the incremental cost above a standard diet qualifies as a necessary expense. This requires medical documentation and substantiation of the actual incremental cost.

How does the health care standard affect an offer in compromise?
The health care allowance reduces your calculated disposable income, which lowers your Reasonable Collection Potential. A lower RCP means you may be able to offer less to settle your tax debt. Claiming the correct allowance for each household member is an important part of building a strong offer.

What expenses are excluded from the IRS out-of-pocket health care standard?
Elective and cosmetic procedures, over-the-counter wellness supplements, gym memberships, and health insurance premiums are all excluded. The standard covers necessary, non-reimbursed medical costs such as doctor visits, prescriptions, and required medical supplies.

Should I hire a tax professional to argue for above-standard health care expenses?
If your actual health care costs are significantly higher than the standard and the difference affects your case outcome, professional representation is worth considering. A tax attorney can present your documentation the way a revenue officer expects, reducing the risk of having legitimate expenses disallowed.