Are Medical Expenses Tax Deductible in California?

Medical expenses are tax deductible in California, but only the portion of your unreimbursed qualifying costs that exceeds 7.5% of your federal adjusted gross income, and only if you itemize on your state return. Someone with a federal AGI of $80,000 gets no deduction on the first $6,000 of medical spending. Everything above that floor can reduce California taxable income, provided your total itemized deductions beat the state’s standard deduction.

How the 7.5% Floor Works

California uses your federal AGI, not your California-adjusted income, to calculate the threshold.¹ Add up every qualifying medical expense you paid during the tax year, subtract any insurance reimbursements, then subtract 7.5% of your federal AGI. What’s left is your deduction.

A quick example. Federal AGI of $60,000, unreimbursed medical costs of $8,000. The threshold is $4,500, so your deduction is $3,500. If your spending doesn’t clear the floor, you get nothing. The 7.5% figure applies the same way regardless of age or filing status.¹

Whether Itemizing Is Worth It

Medical expenses only cut your California tax bill if you itemize. For the 2025 tax year, California’s standard deduction is $5,706 for single filers and those married filing separately, and $11,412 for married couples filing jointly, heads of household, and qualifying surviving spouses.¹ The 2026 figures may be slightly higher after inflation adjustments.

Medical costs alone rarely push you past the standard deduction because the 7.5% floor eats a large chunk. The deduction usually pays off when state and local taxes, mortgage interest, or charitable contributions get you close and medical spending puts you over. Run the numbers both ways before committing. Because California doesn’t conform to every federal itemized deduction rule, your state itemized total can differ from your federal total. You might take the standard deduction federally and still itemize on your California return, or the reverse.

What Counts as a Qualifying Medical Expense

California follows the federal rules for what qualifies, incorporating much of the Internal Revenue Code through Revenue and Taxation Code Section 17201.² Any expense primarily aimed at diagnosing, treating, or preventing a physical or mental condition counts.

That covers payments to doctors, dentists, surgeons, chiropractors, psychiatrists, and psychologists. Prescription medications and insulin qualify, along with diagnostic tests, lab work, and X-rays. Medical devices such as eyeglasses, contact lenses, hearing aids, wheelchairs, and prosthetic limbs are deductible, as are supplies like bandages and blood-sugar test kits.³ Inpatient treatment at hospitals and residential treatment centers is included, meals and lodging during the stay too.

You can claim expenses paid for a spouse or qualifying dependent. Under certain self-employed health insurance arrangements you can also cover a child under 27 who isn’t your dependent for other tax purposes.⁴ The expense must be paid during the tax year you’re claiming it, regardless of when the treatment happened.

Home Modifications for a Disability

Certain medically necessary home improvements are deductible, with one wrinkle. If the improvement raises property value, you can only deduct the difference between the cost and the value increase. If it doesn’t raise value, you deduct the full cost.³

Modifications that typically don’t add value include entrance ramps, widened doorways, grab bars, porch lifts, lowered kitchen cabinets, and modified fire alarms or smoke detectors. Elevators generally do add value, so you’d subtract the increase from the installation cost. Extra spending for aesthetic upgrades beyond what’s medically necessary isn’t deductible.³

Service Animals

The costs of buying, training, feeding, grooming, and providing veterinary care for a service animal are all deductible medical expenses.⁵ This covers guide dogs, hearing-assistance animals, and other animals trained to help with a physical disability. Emotional support animals not trained for a specific disability-related task don’t qualify.

Medical Travel

Transportation to and from medical appointments is deductible, including mileage on your personal vehicle, parking, tolls, bus fare, and ambulance costs. For 2026, the IRS standard mileage rate for medical travel is 20.5 cents per mile.⁶ Lodging (not meals) up to $50 per night per person is deductible when medical care requires travel away from home, including lodging for a parent accompanying a child.

Weight-Loss Programs and Nutritional Counseling

A weight-loss program qualifies only if it treats a specific disease diagnosed by a physician, such as obesity, diabetes, hypertension, or heart disease. The same rule applies to nutritional counseling and to gym memberships used solely for physician-directed treatment of a diagnosed condition.⁷ Without a physician diagnosis linking the program to a specific condition, the cost is personal and nondeductible.

Long-Term Care and Nursing Homes

Nursing home costs are fully deductible when the person is there primarily for medical care, meaning the entire bill (meals and lodging included) counts. When the stay is mainly for personal or custodial reasons, only the portion attributable to actual medical care qualifies.⁸ That’s the sticking point for a lot of assisted-living bills, where the medical component is a fraction of the total.

Qualified long-term care insurance premiums are also deductible, but only up to an age-based annual cap. For 2025 the caps are:

Age 40 or under: $480
Age 41 to 50: $900
Age 51 to 60: $1,800
Age 61 to 70: $4,810
Age 71 or over: $6,020

Limits apply per person and are adjusted annually for inflation.⁹ Any premium above the cap for your age group is not deductible.

What You Cannot Deduct

The IRS separates medical treatment from general health maintenance. Vitamins, supplements, and hygiene products like toothpaste don’t qualify, even if a doctor recommends them. Over-the-counter medications are nondeductible unless a physician specifically prescribes them for a diagnosed condition.³

Cosmetic surgery is excluded unless it corrects a deformity from a congenital abnormality, an accidental injury, or a disfiguring disease. Teeth whitening, liposuction for appearance, and facelifts all fail. General-fitness gym memberships don’t count either, though a membership prescribed specifically to treat a diagnosed condition can.³

Any expense reimbursed by insurance, an employer plan, or a legal settlement doesn’t count. Only the out-of-pocket amount you actually absorbed goes toward the deduction.¹⁰ If you get a reimbursement in a later year for expenses you already deducted, you may need to report that reimbursement as income.

Where California Differs From Federal Rules

HSAs Are Not Tax-Advantaged in California

This catches Californians off guard. Federally, you contribute to a Health Savings Account with pre-tax dollars, the funds grow tax-free, and you withdraw them tax-free for qualified medical expenses. California recognizes none of that. Contributions aren’t deductible on your state return, employer contributions must be added back to California taxable income, and investment earnings inside the account are taxable by the state.¹¹

There is a silver lining for itemizers. Because California treats HSA distributions as coming from after-tax dollars, medical expenses paid with HSA funds are not considered “reimbursed” for state purposes. You can include those expenses in your California medical deduction on Schedule CA (540), which can produce a larger deduction than you claimed federally.¹² The Schedule CA instructions tell you to enter the qualified HSA-paid expenses that exceed 7.5% of federal AGI as an addition on Line 4, Column C.

Assembly Bill 781 was proposed to align California with the federal HSA rules for tax years beginning on or after January 1, 2026, but it had not been enacted as of early 2026. Check the Franchise Tax Board’s website for the current status before filing.

Self-Employed Health Insurance

Federally, self-employed people take an above-the-line deduction for health insurance premiums, which reduces AGI and doesn’t require itemizing. You need net self-employment income, and the plan must be established through your business. The deduction covers you, your spouse, dependents, and children under 27, and it’s unavailable for any month you were eligible for an employer-subsidized plan (even if you didn’t enroll).⁴

California adds a twist. Workers classified as independent contractors federally but as employees under California law cannot claim the above-the-line self-employed health insurance deduction on the state return. Instead, they include those premiums as medical and dental expenses on Schedule CA (540), subject to the 7.5% AGI threshold.¹² That’s a worse deal than the federal treatment, but better than losing the deduction entirely.

How to Claim the Deduction on Your California Return

The deduction goes through Schedule CA (540), where California adjusts your federal itemized deductions for state purposes.¹³ In Part II you report total medical and dental expenses on Line 1, enter federal AGI on Line 2, multiply by 7.5% on Line 3, and subtract to get your deduction on Line 4. If your California-allowed deduction differs from the federal amount (from HSA expenses or reclassified self-employed health insurance), enter the difference in Column B or Column C.¹²

Attach the completed Schedule CA to Form 540. The final itemized deduction amount transfers to Line 18 of Form 540.¹³ Electronic filing is fastest. California’s deadline is April 15, 2026 for tax year 2025 returns, with an automatic extension to October 15 for filing (though tax owed is still due April 15).¹⁴

Records to Keep

Save every receipt, explanation of benefits statement, and reimbursement record. Keep a mileage log if you’re deducting medical travel at the standard rate. The IRS requires you to retain supporting records for at least three years from the date you filed, six years if you underreported income by more than 25% of gross income.¹⁵ California’s Franchise Tax Board audits within similar timeframes, so four years from filing is a safe minimum.

Group expenses by category (provider payments, prescriptions, equipment, travel) and keep a running total during the year. If you can see early that you’ll clear the 7.5% floor, timing an elective procedure or a major equipment purchase to the same tax year gets more of it into the deductible portion.

1
Franchise Tax Board. Deductions
2
California Legislative Information. California Revenue and Taxation Code 17201
3
Internal Revenue Service. Publication 502, Medical and Dental Expenses
4
Internal Revenue Service. Instructions for Form 7206
5
Internal Revenue Service. Fact Sheet for Service Animals for Taxpayers with Disabilities
6
Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents
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Internal Revenue Service. Frequently Asked Questions About Medical Expenses Related to Nutrition, Wellness and General Health
8
Internal Revenue Service. Medical, Nursing Home, Special Care Expenses
9
Internal Revenue Service. Eligible Long-Term Care Premium Limits
10
Internal Revenue Service. Topic No. 502, Medical and Dental Expenses
11
Franchise Tax Board. Bill Analysis, AB 781 – Health Savings Account Deduction Conformity
12
State of California Franchise Tax Board. 2025 Instructions for Schedule CA (540)
13
Franchise Tax Board. 2025 Schedule CA (540) California Adjustments – Residents
14
Franchise Tax Board. Due Dates: Personal
15
Internal Revenue Service. Topic No. 305, Recordkeeping