Paul L. Caron
Dean




Tuesday, August 3, 2010

You Can't Buy Medical Marijuana With Pre-Tax Dollars From Your HSA

Marijuana Wall Street Journal, At Work, a Drug Dilemma:

An employee recently approached Josh Ward, an executive at a Denver plumbing company, with a question he never thought he'd hear. Her husband, the employee said, is a state-registered medical marijuana patient. Could she buy his marijuana with her company-provided flexible spending account? ...

Mr. Ward did a bit of research and quickly told the employee no. Her account, funded with pretax dollars, is regulated by the IRS and cannot be used to purchase a drug that's illegal under federal statutes, even if Colorado treats it as a legitimate medication.

  • IRS Publication 502, Medical and Dental Expenses 15 (2009):  "You cannot include in medical expenses amounts you pay for controlled substances (such as marijuana, laetrile, etc.), in violation of federal law."
  • MSNBC, Should Your HSA Pay for Pot?:  "Why can't you use your Health Savings Account or Flexible Spending Account to pay for it? ... One cannot use the cost of marijuana because it is not legal under federal law," says Dean Patterson of the IRS.

(Hat Tip: David Herzig.)

UpdateDon't Bogart That Deduction: IRS Says Marijuana Is a Medical Expense

https://taxprof.typepad.com/taxprof_blog/2010/08/you-cant-buy-medical-marijuana-.html

IRS News, Tax | Permalink

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Comments

The employee should move to Canada as our tax laws were amended in 2005 to permit marijuana as a medical expense...

"The list of medical costs eligible for the medical expense tax credit will be expanded effective for 2005 and subsequent years to include...The cost of drugs purchased under Health Canada's Special Access Programme and medical marijuana purchased from Health Canada or a designated grower."

Posted by: JamieG | Aug 4, 2010 6:47:32 AM

Bummer, man. ;)

Posted by: AMTbuff | Aug 3, 2010 7:10:47 PM