Diagnostic devices and testing kits generally are qualified medical expenses. You can pay for them tax-free through a Health Savings Account, Flexible Spending Account, or Health Reimbursement Arrangement, and you can include them in the medical expenses you deduct on Schedule A if you itemize. The requirement that decides every close call is whether the device or test serves a genuine medical purpose, meaning it diagnoses, treats, mitigates, cures, or prevents a disease or affects a structure or function of the body.
The Rule That Decides Eligibility
Section 213(d) of the Internal Revenue Code defines medical care as spending on the diagnosis, treatment, mitigation, cure, or prevention of disease. 1Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses HSAs, FSAs, and HRAs all key off this same definition. 2Office of the Law Revision Counsel. 26 USC 223 – Health Savings Accounts IRS Publication 502 spells out the practical corollary: you can include the cost of devices used in diagnosing and treating illness and disease. 3Internal Revenue Service. Publication 502 – Medical and Dental Expenses
The working test the IRS and courts apply is often called the “but for” test: would you have bought this item if you didn’t have a medical condition? A glucometer has no recreational use, so it’s an easy yes. A smartwatch with a heart-rate feature is harder, because most people buy one for notifications and general fitness, not to manage a cardiac condition. Personal and general living expenses don’t qualify even when they touch on health. 4Office of the Law Revision Counsel. 26 USC 262 – Personal, Living, and Family Expenses A bathroom scale or a general fitness tracker falls on the wrong side of that line.
Devices and Tests That Qualify
These categories are widely accepted on the strength of a receipt alone:
- Blood glucose monitors, test strips, lancets, and continuous glucose monitors
- Blood pressure monitors, both upper-arm and wrist styles5FSAFEDS. Eligible Health Care FSA (HC FSA) Expenses
- Digital, infrared, and ear thermometers
- Pulse oximeters
- Pregnancy test kits, which Publication 502 identifies by name3Internal Revenue Service. Publication 502 – Medical and Dental Expenses
- Ovulation and fertility monitors
- Home COVID-19 rapid antigen tests and PCR collection kits
- Home cholesterol testing kits
Since the CARES Act took effect in 2020, over-the-counter diagnostic products no longer need a prescription for HSA or FSA reimbursement, and that change is permanent. 6Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act You can pay at checkout with your account card.
Dual-Purpose Items and Gray Areas
Not every diagnostic-looking product qualifies automatically. A device that serves both a medical and a general wellness purpose is treated as “dual-purpose” and requires a Letter of Medical Necessity from a licensed provider. The letter should identify your specific diagnosis, name the device or test being recommended, and explain why it’s medically necessary. Many administrators require the letter to be dated before the purchase, so getting it after the fact can sink the claim. An LMN is generally valid for up to 12 months.
Direct-to-consumer genetic testing kits sit in this gray zone. The IRS has approved deductions for genetic tests that provide health information, including screening for disease predisposition, carrier status, and genetic health risks. The portion of a kit devoted to ancestry or non-health features does not qualify, and a bundled kit may need documentation to split the cost.
Food sensitivity and allergy kits face the same scrutiny. A kit ordered because a doctor suspects a food allergy is straightforward. A kit bought out of curiosity is not. This is where most reimbursement denials happen: people assume a device qualifies because it measures something health-related, without establishing the medical reason for buying it.
Paying With an HSA, FSA, or HRA
All three accounts use the Section 213(d) definition to decide what counts as a qualified medical expense. Where they differ is in ownership, deadlines, and, in the case of HRAs, the specific plan design.
Health Savings Account
An HSA belongs to you and rolls over indefinitely. For 2026, the contribution limit is $4,400 for self-only coverage and $8,750 for family coverage, with a $1,000 catch-up at age 55 if you’re not on Medicare. You must be enrolled in a high-deductible health plan to contribute. Funds spent on qualified diagnostic devices come out tax-free, and you can reimburse yourself for a past purchase as long as the HSA was open when you incurred the expense; there is no deadline to submit.
Flexible Spending Account
An FSA is employer-sponsored, capped at $3,400 for 2026, and generally must be used within the plan year. Your employer may offer either a grace period of up to two and a half months to incur new expenses, or a carryover of up to $680 into 2027, but not both. 7FSAFEDS. New 2026 Maximum Limit Updates Anything left over is forfeited, so timing diagnostic purchases around your plan year matters.
Health Reimbursement Arrangement
An HRA is funded entirely by your employer and follows the same qualified medical expense rules, but your specific plan document controls what’s reimbursable. Some HRAs cover the full range of Section 213(d) expenses; others cover only a subset. Check the plan terms before assuming a diagnostic device is in.
Documentation You Need to Keep
A detailed receipt is the minimum. It should show the date, the retailer, a description of the item (not just a SKU), and the amount paid. A credit card statement usually lacks the detail to prove you bought a qualifying device rather than something else in the same transaction.
For dual-purpose items, keep the Letter of Medical Necessity with the receipt. The IRS generally has three years from the date you file to audit a return, or two years from the date the tax was paid, whichever is later. 8Internal Revenue Service. Topic No. 305, Recordkeeping Holding receipts and letters for three years is the safe baseline. If you plan to reimburse yourself from an HSA years after the expense, keep the documentation for three years after the tax year you take the distribution.
What Happens if a Purchase Isn’t Qualified
Using HSA money for something outside Section 213(d) has two consequences: the distribution is added to your taxable income for the year, and you owe an additional 20% penalty tax on that amount. 9Internal Revenue Service. Publication 969 – Health Savings Accounts and Other Tax-Favored Health Plans The 20% penalty falls away once you turn 65, become disabled, or die; after that, non-qualified distributions are taxed as ordinary income without the extra penalty.
If you swipe your HSA card by mistake, the IRS acknowledges that mistaken distributions can sometimes be corrected, but the window is narrow and the rules are restrictive. 10Internal Revenue Service. Instructions for Form 8889 Call your HSA administrator right away rather than waiting until tax season.
FSAs work differently. Claims are reviewed before reimbursement, so the main risk is denial. If a debit card charge passes through initially and the claim is later denied, your employer’s plan may offset the amount against future claims or require repayment.
Deducting Diagnostic Costs on Your Tax Return
If you pay out of pocket, you can include qualified diagnostic devices in the medical expenses you deduct on Schedule A. The deduction is limited to the portion of your total medical expenses that exceeds 7.5% of your adjusted gross income. 11Internal Revenue Service. Topic No. 502, Medical and Dental Expenses With an AGI of $80,000, the first $6,000 in medical spending produces no deduction; only the amount above that counts.
That floor makes the deduction a weak tool for diagnostic devices alone. A $50 blood pressure monitor and $100 in test strips won’t clear it. The deduction becomes useful when diagnostic costs stack with other significant medical bills in the same year, and you also need enough total itemized deductions to beat the standard deduction, which is $15,000 for single filers and $30,000 for married filing jointly in 2026.
One more limit worth knowing: an expense reimbursed by an HSA, FSA, or HRA cannot also be deducted on Schedule A. You get one tax benefit per dollar of medical spending, not two.