Updated May 30, 2023

: Expenses add up quickly if you own a pet. Costs can exceed $2000 a year with food, health treatments, grooming, etc. While pet parenting may feel like a full-time job, the IRS doesn’t seem to think so. The IRS has a list of requirements to claim someone as a dependent and your pet isn’t in it. But the scenario changes when it comes to a service animal. Since it shares a co-dependent relationship with the owner, the owner is eligible for service animal tax deductions.

Sounds like a relief? Not so fast. There are certain nuances that need to be met to qualify for service animal tax deductions. Let’s take a look.

How the IRS Defines a Service Animal for Taxpayers with Disabilities

The IRS recognizes service animals as working animals and not pets. They can be guide dogs, signal dogs, etc. that receive training directly related to their handler’s specific disability and provide assistance to them. Some of the tasks they can perform include:

• Guiding the visually impaired
• Guiding those who are hard of hearing
• Assisting those with limited mobility or mobility disorders
• Pulling a wheelchair
• Protecting a person having a seizure
• Reminding the handler to take medicine
• Assisting a person with Post Traumatic Stress Disorder (PTSD) during an anxiety attack
• Other disability-related tasks

What About Service Animals for Those With Mental Disorders?

While the above list mentions PTSD, the definition puts those with psychological, intellectual, psychiatric, and other categories of mental disorders in a gray area. The IRS eliminated this doubt in a 2010 letter to former Congressman, John Tanner that stated the following:

“The costs of buying, training, and maintaining a service animal to assist an individual with mental disabilities may qualify as medical care if the taxpayer can establish that the taxpayer is using the service animal primarily for medical care to alleviate a mental defect or illness and that the taxpayer would not have paid the expenses but for the
disease or illness.”

Reasons Why a Service Animal is Tax Deductible

The cost of living with a disability, mental or physical, is high. Limited abilities limit work opportunities, thus causing financial strain. Many may not even be able to afford regular physician visits, medicines, and medical equipment. A service animal, while a necessity for many, is also an added expense. A service dog costs somewhere between $15,000 and $30,000 upfront. On top of that, the yearly ownership cost can vary between $500 to $10,000. No major insurance companies cover service animal expenses, which makes it even more difficult to bear the cost.

But these animals are still necessities. Just as any medical equipment like hearing aids, wheelchairs, travel expenses for medical care, etc., service dogs are considered medical aid for a disabled person, physical and mental. Therefore, they are a part of your medical expense, which makes them tax-deductible according to the IRS. So whether the service animal is for you, your spouse, or any of your dependents, the expenses are covered. This tax write-off helps a great deal in helping those with disabilities or a taxpayer whose family member is disabled live a better life.

Tax-Deductible Service Animal Expenses

So far, we have established that service animal tax deductions fall under the category of medical expenses on your taxes. However, you are only eligible if your medical expense exceeds 10% of your Adjusted Gross Income (AGI).

What is an AGI? Gross income includes wages, business income, dividends, and other income. AGI is your gross earning minus adjustments like student loan interests, contributions to a retirement account, alimony, etc.

If you qualify for service animal tax deductions, following are some of the costs that are considered tax deductible:

• Cost of buying a service animal
• Training cost
• Licensing fees
• Food expenses
• Veterinary fees
• Grooming cost
• Animal equipment like leashes, harnesses, vests, etc.

According to the IRS, all expenses incurred to maintain the vitality and health of the service animal to continue performing its duties are covered.

When is it Beneficial to Seek Service Animal Tax Deductions?

First, let’s talk about standardized deduction. It amounts to $12,950 when filing as a single taxpayer or as a married person filing separately. For a married couple filing jointly, the standardized deduction is $25,900. However, when you claim tax write-offs on your service animal expenses, you need to itemize your deductions by filing Schedule A on Form 1040.

While it may sound like a daunting task, it is worthwhile. However, it only makes sense to file itemized deductions if it exceeds your standard deduction. Otherwise, it’s all work, less return.

Another option is to claim ‘impairment-related work expenses’. This is less limiting than medical expense deductions. Who can qualify? Only those with a physical or mental disability that restricts employment opportunities for them or limits regular activities like walking, breathing, speaking, learning, performing manual tasks, etc.

Documents You Need to Claim Service Animal Tax Deductions

To be eligible for service animal tax deductions, you need to prove that the animal assists you with a diagnosed physical or mental disability. So you will need documentation from your physician and receipts of all qualified medical expenses. These documents will come in handy if the IRS decides to conduct an audit and comes calling at your door.

If you have a psychiatric condition that necessitates the use of a service animal, we can help with the documents. At National Service Animal Registry, when you register your psychiatric service dog (PSD) in our database, your dog gets a unique identification number which can be used by the IRS to verify the status of the animal, if required.

Additionally, we assist with psychiatric service dog letters. You can order a PSD letter on our website and we will give you an assessment to fill up. This will be reviewed by our licensed mental health practitioner (LMHP) and if you qualify, the letter will be delivered to you.

Information That a Psychiatric Service Dog Letter Must Include to Act as Proof for Tax Deductions

This letter is one of the primary documents to support your claim for service animal tax deductions. The Psychiatric Service Dog letter must be written on the official letterhead of the LMHP and contain the following details:

• Diagnosis of your impairment
• Requirement of a service dog to assist with your daily tasks
• Name and contact information of the LMHP
• License date and jurisdiction of LMHP
• Signature of LMHP
• Date of issue

Keep in mind that a PSD letter is valid for one year from the date of issue. So you will need to renew it to keep your tax documents updated to avail service animal tax deductions.

A Few Things to Keep in Mind

To be eligible for tax benefits related to service dogs, individuals must have a disability recognized under the ADA. This includes physical, sensory, mental, or emotional impairments that substantially limit one or more major life activities. Additionally, the service dog must be trained to perform specific tasks directly related to the individual’s disability.

• If your service dog expense is covered via a donation or is reimbursed from a source other than your income, you will not be able to claim service animal tax deductions
• Other animal-related expenses that are eligible for tax deduction include fostering pets, business animals, and taxable income from pets
• Your service animal should be harnessed, leashed, or tethered unless it interferes with its ability to perform its tasks
• A service animal is recognizable by the harness. If you are out in public, at a restaurant, seeking accommodation, etc. with your service dog, no one can ask you about the disability you have or ask you to have the dog demonstrate its tasks.
• Your service animal should be housebroken and under your control at all times when out in the public

Maximizing Potential Benefits for Service Dog Handlers: Service Animal Tax Deductions and More

Apart from tax implications, service dogs offer various benefits to their handlers. These include increased independence, improved safety and security, enhanced mobility, and emotional support. Service dogs are trained to assist individuals in various environments, enabling them to participate more fully in society.

Additionally, under the ADA, service dogs are granted certain rights and protections, such as being allowed access to public places, transportation, and housing, regardless of any pet-related restrictions or policies. These rights help ensure that individuals with disabilities can enjoy equal opportunities and accommodations.

Conclusion:

The aim of this blog is to inform you about the tax write-offs that you can claim if you own a service animal. However, it is not intended to serve as a financial guide for your tax decisions. It is always recommended to commission a tax specialist to help you navigate the intricacies of filing and ensure that you get every possible deduction you are eligible for.

If you need any help with the PSD letter or registering your service dog in our database, reach out to us at (719) 756-2634or send an email to info@nsarco.com. We would be happy to assist you.

What Is a Service Dog?

Service animals are dogs trained to perform major life tasks to assist people with physical or severe psychiatric impairments/disabilities. Service animals are sometimes referred to as assistance animals, assist animals, support animals, or helper animals depending on the country and the animal’s function.

What Is a Physical Impairment?

A physical impairment is any medical disorder, condition, disfigurement or loss affecting one of the body systems, such as neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, and endocrine.

Examples of conditions that are impairments: AIDS, and its symptoms; Alcoholism; Asthma; Blindness or other visual impairments; Cancer; Cerebral palsy; Depression; Diabetes, Epilepsy; Hearing or speech impairments; Heart Disease; Migraine Headaches; Multiple sclerosis; Muscular dystrophy; Orthopedic impairments; Paralysis; complications from Pregnancy; Thyroid gland disorders; Tuberculosis; loss of body parts.

What Are Major Life Tasks?

These activities consist of functions such as caring for yourself, (including, but certainly not limited to bathing, dressing, shaving, preparing a meal, and going to the restroom), performing manual tasks, eating, sleeping, standing, walking, lifting, reaching, bending, seeing, hearing, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working.

As a result of the Americans with Disabilities Act Amendments Act, major life activities now also include the operation of any major bodily function, including, but not limited to functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive (procreation) functions.

Major life activities do NOT include the following:

• Caring for others
• Driving
• Ability to have a relationship
• Grocery shopping

Do You Need a Letter from a Doctor to Qualify?

It isn’t necessary to possess a letter from a physician that states you are disabled and require a trained service dog, but if someone legally challenges a person claiming to be disabled, proof of the disability will be necessary at that point. What you must be prepared to do when in public is confirm you are disabled and provide credible verbal evidence of what your service dog is trained to do.

How to Get a Service Dog

There are organizations who help pair a service dog with a disabled handler, and the training process takes time, substantial financial investment, and patience. The training begins with basic manners and continues to involve thorough socialization, impulse control and the specialized skills required to support their handler. The formal training procedure typically culminates with passing the Public Access test and Canine Good Citizen Test, which assesses the capability of the dog to be a proper, unobtrusive helpmate in public. Then, the handler and dog are matched and train together to be a working team. The scope of work that goes into preparing a service dog for the responsibility of assisting their handler and acting properly in public goes well beyond what usually occurs in pet dog training. People with disabilities have the legal right to take their service dog to any area where the general public is allowed, from movie theaters to hospitals, even when pets aren’t allowed.

Some handlers train their own pets, but typically begin with public behaviors (good dog manners), obedience, and finally task-specific training. This is a cost-effective method of attaining a service dog.

What Are Your Protection and Rights with a Service Dog?

The Americans with Disabilities Act (ADA), as amended by the ADA Amendments Act of 2008 (ADAAA), 42 U.S.C. 12101, prohibits discrimination on the basis of a “disability” in several critical areas. Those areas include:

• State and local government services
• Places of public accommodation
• Employment
• Telecommunications
• Transportation

That means you are entitled by federal law to be accompanied by your service dog anywhere a non-disabled person could go, even when pets are NOT allowed.

Flying with a Service Dog

If you are disabled and have a trained service dog, you have the right to be accompanied by your service dog in the cabin of an aircraft and not be charged a fee. There are some limitations and exceptions that can be made at the discretion of airline personnel, however. For example, the animal must be able to stay on the floor between your knees and the seat in front of you. If the dog is too large or the plane to crowded, they can require you to crate the dog.

Qualify for No Pet (Including Limited Size/Species/Breed) Housing

The Fair Housing Amendments Act of 1988 requires property managers and landlords to make a reasonable accommodation (a change in the rules) to permit a disabled handler to have a service dog and not be charged a pet or other fee. That means if they have a “cats only” policy, they must accept your service dog. If they have a policy that allows dogs weighing no more than 30 lbs. and your service dog weighs 75 lbs., they must make a change in the rules to accommodate you. If they accept all dogs, except pit bulls, and you have a pit bull, they must allow your pit bull to reside with you.

What Kinds of Facilities are Places of Public Accommodation?

A “place of public accommodation” includes almost every type of operation which is open for business or which comes in contact with the general public. Specifically, it includes any commercial facility, operated by a private entity (not the government), whose operations fall within at least one of 12 different categories. A disabled person is protected by law to be accompanied by a service dog in the following areas:

• Places of lodging.
  • Examples: An inn, a hotel, a motel.
• Establishments serving food or drink.
  • Examples: A restaurant, a bar.
• Places of exhibition or entertainment.
  • Examples: A movie house, a theater, a concert hall, a stadium.
• Places of public gathering.
  • Examples: An auditorium, a convention center, a lecture hall.
• Sales or rental establishments.
  • Examples: A bakery, a grocery store, a clothing store, a hardware store, a shopping center, bookstores, video rental stores, car rental places, pet stores, jewelry stores.
• Service establishments.
  • Examples: A laundromat or dry cleaner; a bank, a barber shop, a travel service, a shoe repair shop, a funeral parlor, a gas station, a lawyer’s or doctor’s office, a pharmacy, an insurance office, a hospital.
• Stations for public transportation.
  • Examples: A terminal, a depot, or other station for transportation by bus, train, or airplane.
• Places of public display or collection.
  • Examples: A museum, a library, a gallery.
• Places of recreation.
  • Examples: A park, a zoo, a beach, an amusement park.
• Places of education.
  • Examples: A nursery or preschool, an elementary, secondary, undergraduate or postgraduate private school.
• Social service center establishments.
  • Examples: A day care center, a senior citizen center, a homeless shelter, a food bank, an adoption agency, substance abuse treatment centers, rape crisis centers, halfway houses.
• Places of exercise or recreation.
  • Examples: A gym, a health spa, a bowling alley, a golf course.

It’s important to know that private clubs and religious organizations are NOT considered public accommodations.

Title III of the ADA does not apply to:

• Private clubs, not open to the public
• Religious organizations and places of worship

Service Dog Registration and Accessories

Service dog registration is not legally required, nor is your service dog required to wear a service dog vest, service dog patches, or have an ID card. Airline companies and other entities strongly encourage these things, however. If your service dog LOOKS like a service dog, then confrontations will be minimized in public and at the airport. It makes having your service dog with you in public much easier and hassle-free.