Purchasers of 23andMe Inc.’s genetic-testing kits will now have a better time paying for the service with tax-advantaged health accounts after a good IRS ruling. The choice presents extra readability to customers and reduces the price of the corporate’s service. It additionally highlights variations between the tax regulation’s permissive definition of medical care and well-being regulators’ extra restrictive strategy to direct-to-shopper testing merchandise.
The Internal Revenue Service made the ruling in May and can launch a redacted model subsequent month. The Wall Street Journal reviewed the document earlier than 23andMe disclosed it Monday.
The corporate sells genetic checks that present shoppers with details about quite a lot of issues, together with ancestry, wellness, and traits equivalent to meals-style preferences. The health studies present info on whether or not people have gene variants that improve their threat for creating certain illnesses.
That health portion of 23andMe’s take a look at is medical examination after-tax functions, the IRS decided. It made no ruling on ancestry testing from the identical saliva pattern and mentioned taxpayers could use affordable strategies to separate the tax-advantaged piece from the bundled product.
23andMe says the choice means shoppers can declare as much as $117.74 of the $199 price of a well being-and-ancestry package as medical take care of tax functions and is providing a calculator to deal with taxes, transport, and reductions. Jacquie Haggarty, the corporate’s deputy standard counsel, mentioned any 2019 purchases needs to be eligible bills.
Meaning folks with tax-advantaged versatile spending accounts or well being-financial savings accounts for his or her out-of-pocket prices can use that cash to buy the kits. Genetic-testing kits might be extra simply added to end-of-year purchasing lists—together with perennial favorites like sunscreen and get in touch with-lens answer—by individuals making an attempt to empty their use-it-or-lose-it FSA balances. People who itemize deductible medical bills can embrace these costs.
Ms. Haggarty mentioned clients requested 23andMe for help in utilizing their tax-advantaged accounts for the checks, and till now, there was no clear reply.