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Medical Test for Tax Reasons

The US Internal Revenue Service has concluded that the health aspect of 23andMe's genetic test is medical care for the purposes of taxes, the Wall Street Journal reports.

This ruling, it says, means that consumers in the US can use their flexible spending accounts or health savings accounts to purchase the tests and that individuals who itemize their medical expenses can also list the test. 23andMe tells the Journal that customers should be able to claim $117.74 of the $199 that its combined health and ancestry kit cost as medical care. The Journal notes that the IRS made no ruling about the ancestry aspect of the test.

It adds that this decision by the IRS underscores the difference between how the IRS and the Food and Drug Administration each determine what is a medical test. In approving its BRCA tests in 2018, FDA stressed that the 23andMe tests should not be used to determine treatment. But, the Journal notes the IRS has a looser definition of medical care, with it saying it is "for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body."