Tax Deduction for Pet Care Expenses

A Proposed Tax Bill Rendering Pet Expenses Tax Deductible

Nov 2, 2009

The Humanity and Pets Partnered Through the Years (HAPPY) Act may give U.S. resident taxpayers up to $3,500 of itemized deductions for qualified pet care expenses.

The HAPPY Act was introduced as a bill to Congress by U.S. Rep. Thaddeus McCotter, R-Mich., on July 31, 2009. If passed, the Act will amend the Internal Revenue Code by adding a new itemized deduction for qualified pet care expenses.

Although opponents to the bill argue that the proposed amendment is not a fair use of federal funds as pets are not necessities similar to foods, utilities, clothing, 63% of U.S. households owned a pet according to the 2007-2008 National Pet Owners Survey conducted by the American Pet Products Manufacturers Association. There were over 160 million owned dogs and cats in the U.S. according to the same survey. Many taxpayers also keep pets for physical and emotional reasons. The Act, if adopted, will provide tax relief to a majority of the U.S. taxpayers.

Taxpayers Eligible for Tax Deduction for Pet Care Expenses

A U.S. resident taxpayer who claim itemized deductions on his / her U.S. resident individual income tax return may claim an itemized deduction for qualified pet care expenses he / she incurs in the year on his / her qualified pet.

Qualified Pets Eligible for Tax Deduction for Pet Care Expenses

According to the Act, a qualified pet is a "legally owned, domesticated, live animal" except for an animal

Tax-Deductible Qualified Pet Care Expenses

The proposed bill allows a deduction for any expenses incurred for caring of a qualified pet (including veterinarian care) as pet care expenses except for costs incurred for acquiring the pet. There are no further specific details on allowable or restricted expenditures at this time.

Based on the current draft of the bill, the following expenses on a qualified pet would be considered qualified pet expenses for itemized deduction purposes:

Maximum Tax Deduction Allowed

The maximum amount allowed for the tax deduction is proposed to be $3,500 per year. The bill, at this time, does not specify if there is any difference in the maximum deduction allowed for different filing statuses (e.g. married filing jointly, single, head of household, etc).

Depending on the taxpayer's marginal tax rate, such expenses under $3,500 become effectively 10% to 30% cheaper with the deduction.

The bill has yet to be passed by Congress as of the date of this article (November 2, 2009).

The copyright of the article Tax Deduction for Pet Care Expenses in Personal Tax Planning is owned by Joseph Leung. Permission to republish Tax Deduction for Pet Care Expenses in print or online must be granted by the author in writing.