Owning a pet is a rewarding experience, but it can also be costly. On average, pet owners spend between $1,270 and $2,800 per year on their furry companions. While family pets that provide love and companionship are considered personal expenses and are not tax-deductible, there are some exceptions. If your pet serves a qualifying role, you may be able to deduct certain expenses under three specific categories: medical expenses, business expenses, and charitable deductions.
1. Medical Expense Deduction for Service or Support Animals
If you have a service animal or an emotional support animal that is necessary for your health, you may be eligible for a medical expense deduction. To qualify, the pet must be used primarily for medical care, and the expenses must be incurred due to a medical condition.
Service Animals
The IRS recognizes service animals as working animals trained to assist people with disabilities. These animals perform essential tasks, such as:
- Guiding individuals who are blind or visually impaired
- Alerting individuals who are deaf or hard of hearing
- Assisting with mobility tasks such as pulling a wheelchair
- Picking up and carrying objects for those with physical limitations
- Alerting individuals to seizures or medical episodes
- Providing support for people with post-traumatic stress disorder (PTSD)
While service animals are often professionally trained, owners are not required to use a professional program. However, it’s important to maintain records documenting the training and purpose of the animal.
Emotional Support Animals (ESAs)
Emotional support animals provide comfort to individuals with mental or emotional disabilities. Although ESAs do not undergo specialized training like service animals, the IRS does allow deductions for them under specific conditions:
- A licensed health care professional (therapist, psychologist, psychiatrist, or physician) prescribes or recommends the animal.
- The use of the animal is part of a documented treatment plan.
- The animal was obtained based on a medical professional’s advice.
To claim this deduction, maintain a letter from your healthcare provider stating the medical necessity of the support animal. You should also keep documentation of any training the animal has received.
How to Deduct Medical Pet Expenses
If you own a business with a medical reimbursement plan, you may qualify to have these expenses reimbursed. If not, you may be able to deduct them as an itemized deduction on Schedule A of your Form 1040—but only if they exceed 7.5% of your adjusted gross income (AGI). Due to high standard deductions, only about 10% of taxpayers itemize, making this deduction difficult to claim.
2. Business Expense Deduction for Working Animals
Some animals play an essential role in business operations, making their expenses tax-deductible as business expenses. To qualify, the animal must serve a legitimate business purpose and the expenses must be considered ordinary and necessary to the business.
Guard Dogs
Guard dogs used to protect a business location can be deducted, similar to security-related costs. However, to qualify:
- The dog must be an appropriate breed for security purposes (e.g., Rottweiler, German Shepherd, Doberman Pinscher).
- The dog should receive some form of training.
- If the dog doubles as a family pet, you must track and deduct only the business-related percentage of its expenses.
If you operate a home business and store valuable inventory or equipment in your home office, you may be able to deduct a guard dog’s expenses as well.
Pest Control Animals
Businesses that need pest control can deduct the costs of animals used for this purpose. For example, a junkyard owner was allowed to deduct the cost of cat food used to attract feral cats that helped control rats and snakes.
To qualify:
- Document the need for pest control at your business.
- Ensure the animals serve a clear business function.
Office Aquariums
Office aquariums that improve the aesthetics of a business location, such as a waiting area or office lobby, may be deductible. However, home aquariums do not qualify.
3. Charitable Deduction for Fostering Pets
If you foster pets for a 501(c)(3) charitable organization, you may be able to deduct your out-of-pocket expenses. However, you cannot deduct the value of your time or the space used in your home for fostering.
To qualify for a deduction:
- You must foster animals for a registered 501(c)(3) charity.
- You must pay for pet-related expenses out of pocket.
- You must maintain records of expenses and obtain a written acknowledgment from the organization if expenses exceed $250.
A landmark case allowed a woman to deduct over $12,000 in expenses for fostering feral cats for a charity that specialized in neutering wild cats. The key to claiming this deduction is demonstrating a strong association with the charity and providing proper documentation of expenses.
Deductible Pet Expenses
If your pet qualifies under any of the above categories, you may deduct expenses related to:
- Food
- Bedding
- Boarding
- Training
- Grooming supplies
- Veterinary care
- Medication
- Pet insurance
If the pet qualifies as a business expense, you may claim its cost using Section 179 expensing, the de minimis safe harbor deduction (up to $2,500), or depreciation over seven years.
Key Takeaways
- Family pet expenses are not deductible, as they are considered personal expenses.
- Service animals and emotional support animals may qualify for a medical deduction if prescribed or recommended by a licensed healthcare provider.
- Animals used for business purposes (e.g., guard dogs, pest control cats) may be deductible as business expenses if they serve a legitimate function.
- Pet fostering expenses are deductible if you foster animals for a 501(c)(3) charity and document your expenses properly.
While pet ownership comes with costs, understanding how to legally deduct certain expenses can help ease the financial burden. Always consult with a tax professional to ensure you meet the IRS requirements for pet-related deductions.
