Dr. Coates is a veterinarian based in the other “Sunshine State” – that's Colorado to the rest of you – where she lives and plays with a varied range of animals. She shares her professional and personal experiences, Monday through Friday, here on petMD's blog, the Fully Vetted. Log in for your daily dose of her insight and wisdom.

 

Do tax breaks for pet healthcare make you HAPPY?

September 29, 2009 / (9) comments


Think you deserve a $3,500 annual tax deduction for "qualified pet care expenses"? Think about it. This tax deduction could effectively mean that up to $3,500 of your pet food and veterinary expenses will be 10 to 30 percent cheaper (the degree of savings would depend on your tax rate). 

 

Considering that most responsible pet owners spend about $1,500 every year on their pets , such a proposal might help each individual, or family, support about 2.5 pets a year in the manner to which they’ve become accustomed. 

 

Representative Thaddeus McCotter is the man behind the drive to pass a resolution in favor of such a tax break. He’s is sponsoring the proposed legislation for the Humanity and Pets Partnered Through the Years Act (commonly referred to as the "HAPPY Act").  

 

But back to the initial question: Do you believe pet owners like YOU deserve a tax break for your pets? 

 

In spite of the fact that veterinarians stand to benefit financially from tax breaks applied to the services they supply, you might be surprised to learn that not all of us agree that tax breaks like this are worthwhile. 

 

After all, tax deductions like these tend to benefit those of us who already itemize our expenses, hire accountants to do the heavy lifting and earn incomes worthy of higher tax brackets. In fact, the higher our incomes, the more we stand to gain from this legislation.

 

So why would the US Treasury want to leave all this money on the table? Is it because our government wants to provide incentives for higher quality pet care? Because pets are family and, as such, pet owners deserve write-offs just like human parents do?

 

Ostensibly, yes. That’s the idea, anyway. But would offering incentives to those who already care for their pets actually make a difference in the kind of pet care animals receive? Is it fair to allow "pet parents" to save on pets in the same way "regular parents" do? 

 

Ultimately, it’s my take that the sentiment behind this kind of legislation is right on target. If people treat their pets like family and derive both tangible and intangible benefits from keeping them, then supporting their maintenance and care through broad-based public policies benefits makes sense. Anything that raises the quality of life is a good thing. 

 

The problem, however, is that we cannot devise public policy based on sentiments alone. No matter how important we believe pets to be, policies that support their care and well-being shouldn’t be implemented if they’re so poorly designed that society doesn’t actually stand to benefit from them. 

 

Let me explain: It’s my view that changes in tax policies, specifically those that target tax savings with a very specific goal in mind, should effect an actual change in human spending behavior on that very issue. And I don’t believe this one will. 

 

Consider: Will financially strapped owners spend any more on their pets if they know they can deduct $3,500 off their earnings at the end of the year? If they don’t stand to earn enough to pay any taxes it’ll make no difference to them. If they don’t have enough cash or credit on hand to pay for the needed products or services, it’s also useless. If they make enough to spend the money, whether or not there's a tax incentive, it's similarly unhelpful (in a benefit-to-society kinda way). In fact, it’ll only alter the purchasing decisions of a small sector of the pet-owning population; i.e., those who know about this tax relief, make enough to pay up front and are thoughtful enough to weigh the pros and cons of a veterinarian's recommendations with an eye towards a year-end savings. 

 

Then there’s the issue some naysayers like to raise: Why should we effectively fund the pet care of so many owned animals when so many others languish in underfunded public shelters? Given this reality, can’t we find another way to support animals with these monies? 

 

Sure. But ultimately, the HAPPY Act is not about supporting animals. It’s about supporting families. And unfortunately, it’s my view that it does neither. 

 

Dr. Patty Khuly

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COMMENTS (9)
1
I agree!
by Eli on 09/29/2009 06:14am

Give $3,500 for each family to the shelters. That should be enough money to not only fund the shelter but provide free health care to those families that are unable to pay for the outrageous vet prices we have seen over the last couple of years.

2
Deduction for Pet Meds
by azpaparam on 09/29/2009 06:53am

I agree with some not all, I would like to deduct all MEDICAL expences. I know that if I could deduct operations then I would propably have catarack surgery on my toy minpin. She has diabetias so not sure if that would work. I don't think the deduction for food is a good idea. I can't deduct if for the kids, so why the pets?

3
I disagree
by Pazit on 09/29/2009 12:11pm

I am a postdoc and have a dog and a cat. A postdoc salary is $37000 per year, which is really not a lot in Boston. I have to pay around $400 per month federal tax, and could definitely use that money for healthcare for my pets. I have enough to buy good quality food for them, but not enough to take them to the vet unless it's a real emergency.

4
by Connie on 09/29/2009 03:46pm

I am under no illusion that this bill will pass, because too many Americans are not pet lovers, but I will and have stood up and supported it while it is still a bill to be supported. I think ANYTHING introducing the possiblity to the American people that animals are not disposable is a great thing. Do I think this is the golden goose that is going to fix the animal welfare system in the US? no. Do I think this is going mark serious change in the way we take care of our pets? no. but it is a start. We all have to start somewhere.

as for not being able to deduct for "food" for your kids, that is not completely true. You do get a general tax deduction for each child you have, and that would be for food, clothing and general care.

and just to be clear, every person who takes advantage of the tax credit will not be pocketing $3500. They will not have to pay taxes on their income for that amount, so if you are in the 10% tax bracket then you will be getting a break of $350 roughly (because taxes are a sliding scale)

5
Clarification
by Dr. Patty Khuly on 09/29/2009 05:15pm

I always need to re-clarify this when I explain this proposal: It is not a credit (as the US Tres offers for childcare) but a deduction, which means that most of us stand to save 10%-30% on qualified pet care expenses for up to $3,500 of our expenses if we 1) make enough to pay taxes, 2) we save our invoices/receipts and 3) we itemize. That means that if we spend this much, we'll save $350 to $1,050 a year (the savings depends on your tax bracket). But you have to wait 'till year's end to either receive it as a refund or as a savings on what you owe the IRS. Hope that clears things up.

6
And it will actually cost us
by PJBoosinger on 09/29/2009 10:44pm

Every deduction on our taxes comes with additional administrative costs so we'll actually get even less and everyone shares those admin costs. We'd be much better off to dispense with the majority of credits and deductions, save the admin costs, reduce the size of the IRS while making the system more fair for all to choose their own "special interest" projects to invest in.

7
I'd love a tax break
by Kitty on 09/29/2009 11:16pm

As a single, childless person who rents, I get very few tax breaks on anything, while my taxes go to support things I don't use -- like the public school system, for one. I don't mind this, but I would love it if there was a tax deduction for pet care; I recently lost my cat after two years of renal failure, and I spent a fortune. That money is just gone, and I cannot afford to get another cat because I am afraid of future vet bills. So a cat doesn't get a home, and I have an empty apartment.

8
Clarification
by Dr. Patty Khuly on 09/30/2009 04:20pm

I always need to re-clarify this when I explain this proposal: It is not a credit (as the US Tres offers for childcare) but a deduction, which means that most of us stand to save 10%-30% on qualified pet care expenses for up to $3,500 of our expenses if we 1) make enough to pay taxes, 2) we save our invoices/receipts and 3) we itemize. That means that if we spend this much, we'll save $350 to $1,050 a year (the savings depends on your tax bracket). But you have to wait 'till year's end to either receive it as a refund or as a savings on what you owe the IRS. Hope that clears things up.

9
Tax break will help people that rescue and those facing layoffs/
by Missy Woodward on 10/05/2009 08:44pm

Please see the video I did with Congressman McCotter on this subject at http://www.youtube.com/watch?v=v_uiSuy7TR8. We in the rescue community would greatly benefit and more animals could be saved. As well, people facing layoff/foreclosure are being faced with the horrible dilemma of giving up their pets. At least a tax break could help them continue to feed and keep their pets healthy at year end. Also, people trying to make important decisions on more expensive surgeries to save their beloved pet member of the family could get a break.

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About fully vetted

Jennifer Coates, DVM

Photo of Dr Coates

Image credit: Jim Piraino

...graduated with honors from the Virginia-Maryland Regional College of Veterinary Medicine in 1999. In the years since, she has practiced veterinary medicine in Virginia, Wyoming, and Colorado. She is the author of several books about veterinary medicine and animal care, including the Dictionary of Veterinary Terms: Vet-Speak Deciphered for the Non-Veterinarian. Dr. Coates also writes short stories that focus on the strength and importance of the human-animal bond, and freelance articles relating to a variety of animal care and veterinary topics. Dr. Coates lives in Fort Collins, Colorado with her husband, daughter, and various species of pets.

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