Key Takeaways:
- Therapy is tax-deductible if it is medically necessary and provided by a licensed professional.
- You must itemize deductions on your return and only the amount exceeding 7.5% of your AGI qualifies.
- Not all therapy counts. For example, self-help, coaching, and non-medical treatments are excluded.
- You may also deduct related expenses like travel, medication, and certain school programs for mental health.
- Therapists may deduct therapy only in very limited business-related circumstances.
Understanding how the IRS treats mental health expenses is essential if you’re trying to reduce your tax bill while investing in your well-being. With therapy costs rising and more people prioritizing mental health, it’s a fair question to ask: Can you deduct therapy? The answer is yes, but only under certain conditions. This guide explains when therapy is tax-deductible, which expenses qualify, and how to claim those deductions correctly.
Is Therapy Tax Deductible?
Let’s start with the core question. Yes, therapy can be tax-deductible, but not all types of therapy and not for everyone.
The IRS Definition of Medical Expenses
To understand when therapy is deductible, it helps to know how the IRS defines medical expenses. According to IRS Publication 502, medical expenses are “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease.” That includes both physical and mental health conditions.
Under this definition, mental health care, like therapy, psychiatry, and psychological counseling, qualifies if it is recommended by a licensed healthcare provider to treat a medical condition.
Therapy Must Be Medically Necessary
This is the IRS’s key standard. Only therapy deemed medically necessary is deductible. That means:
- It must be intended to diagnose or treat a mental illness, such as anxiety, depression, PTSD, or ADHD.
- It must be provided by a licensed provider, such as a licensed therapist, psychologist, or psychiatrist.
- It cannot simply be for general personal development, life improvement, or relationship enhancement.
For example, say you attend therapy to treat generalized anxiety disorder (GAD). Those costs are eligible to be deducted. But if you see a coach to improve your confidence at work, that’s not deductible.
What Types of Therapy Can Be Deducted?
Therapy comes in many forms, and not all of them are treated equally by the IRS. Here’s what qualifies and what doesn’t.
Deductible Therapy Services
As long as the services are medically necessary and provided by a qualified professional, the following therapy types are generally deductible:
- Psychotherapy and talk therapy provided by a licensed therapist
- Psychiatric care, including evaluation and medication management
- Cognitive Behavioral Therapy (CBT) and other evidence-based modalities
- Family or couples therapy, but only if it’s part of a treatment plan for a diagnosed condition
- Addiction counseling or rehab programs, if supervised by licensed professionals
Non-Deductible Therapy Examples
Certain therapy-related expenses may feel valuable but don’t qualify as medical deductions under IRS rules:
- Life coaching or personal development
- Unlicensed practitioners or services not supervised by a medical provider
- Relationship counseling without a medical diagnosis
- Spiritual therapy, unless prescribed and provided under medical supervision
- Alternative therapies (such as Reiki, breathwork, or energy healing), unless explicitly recommended by a licensed medical provider as part of a treatment plan
A good rule of thumb is if your insurance won’t cover a type of therapy, chances are the IRS won’t either.
How to Claim Therapy as a Tax Deduction
If your therapy qualifies, claiming the deduction involves a few important steps.
You Must Itemize Deductions
First, you must itemize deductions to claim any medical expenses, including therapy. That means filing Schedule A (Form 1040) and listing all eligible deductions instead of taking the standard deduction.
For 2025, the standard deduction is:
- $15,000 for single filers
- $30,000 for married filing jointly
- $22,500 for head of household
If your total deductions, including medical expenses, are less than the standard amount, it may not be worth itemizing.
Meet the 7.5% Rule
Even if you itemize, you can only deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI). For example, let’s say your AGI is $50,000. Only the amount of medical expenses over $3,750 (7.5% of $50,000) can be deducted. So, if you spent $6,000 on therapy and other qualified medical expenses, only $2,250 would be deductible.
Additional Mental Health Costs That May Be Deductible
Therapy isn’t the only mental health expense that can be claimed. The IRS allows deductions for related costs that are part of obtaining treatment.
Related Medical Expenses
These may include:
- Prescription medications for mental health conditions (e.g., antidepressants, ADHD medication)
- Lab tests or imaging recommended for mental health diagnostics
- Out-of-pocket payments for therapy sessions or psychiatric care
- Hospital stays for mental health treatment
- Teletherapy sessions, as long as they meet the same criteria as in-person care
Special Circumstances
There are also some less obvious mental health deductions. Transportation to and from appointments is deductible. You can deduct either the actual cost (public transport, taxi) or use the IRS standard mileage rate for medical travel. This is 21 cents per mile in 2025. Lodging up to $50 per night is deductible if treatment is far from home and medically necessary. In addition, if a doctor recommends a school for a child’s mental health treatment, tuition and related costs may be deductible with proper documentation. This is common for those with autism, anxiety disorders, or requiring behavioral therapy. In all cases, a doctor’s recommendation and detailed records are crucial.
What Documentation Do You Need?
Even if you qualify, you’ll need proper documentation in case of an audit or IRS inquiry.
- Invoices or receipts from your therapist or provider
- Proof of payment (bank or credit card statements)
- Mileage logs or receipts for travel and lodging
- Doctor’s note or referral, if therapy is part of a treatment plan
- Explanation of diagnosis, if needed to justify the medical necessity
Keep all documentation organized and accessible for at least three years after you file your return.
Can Therapists Deduct Therapy as a Business Expense?
If you’re a mental health provider or therapist yourself, the rules are slightly different.
Therapist Receiving Therapy
Generally, if you’re a therapist attending therapy for personal reasons, it’s not deductible, even if it improves your performance at work. However, if your state licensing board requires therapy (for example, as part of clinical supervision or to complete a licensure process), it may be deductible as an unreimbursed work-related expense. That said, employee business expenses are no longer deductible for most workers due to the 2017 Tax Cuts and Jobs Act. Only self-employed professionals or those filing as businesses may benefit here.
Business-Related Deductions
Therapists and counselors can deduct therapy-related expenses only if they are business-related, such as:
- Peer consultation groups or supervision fees required for licensing
- Continuing education programs (as long as the course maintains or improves your skills)
- Travel costs for attending therapy workshops or conferences
- Therapy journals, assessments, or subscriptions used in your practice
In all cases, you must separate business use from personal use, and the expense must be “ordinary and necessary” for your profession.
Frequently Asked Questions
Q: Can I write off therapy on taxes.
A: Yes, you can write off therapy on your taxes if it is medically necessary and provided by a licensed professional. To qualify, you must itemize deductions and your total unreimbursed medical expenses must exceed 7.5% of your adjusted gross income (AGI).
Q: Is therapy considered a medical expense for child support.
A: Yes, therapy is typically considered a medical expense in child support agreements when it is necessary for the child’s mental health. Courts often treat counseling and psychological treatment the same as physical healthcare.
Q: What proof do I need to deduct medical expenses?
A: To deduct medical expenses, you need detailed records such as receipts, invoices, proof of payment, and documentation showing that the service was medically necessary. Keep these records for at least three years in case of an IRS audit.
Q: Is therapy HSA eligible?
A: Yes, therapy is eligible for HSA (Health Savings Account) reimbursement if it is used to diagnose, treat, or prevent a mental health condition. The therapy must be provided by a licensed healthcare provider.
Q: Does mental health therapy qualify for FSA?
A: Yes, mental health therapy qualifies for FSA (Flexible Spending Account) reimbursement when it is medically necessary and performed by a licensed professional. You may need to submit documentation or a letter of medical necessity, depending on your FSA provider.
Tax Help with Mental Health Deductions
To make the most of your eligible therapy deductions, it’s important to be strategic and organized. Track your medical mileage using IRS-compliant logs, keep all receipts and documentation in a secure, easy-to-access location, and consider bundling major medical expenses into a single tax year to increase your chances of surpassing the 7.5% AGI threshold. If your situation involves dependents, special education, or therapy that overlaps with personal development, consult a qualified tax professional to ensure you’re following IRS rules and maximizing your tax benefit. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers.
If You Need Tax Help, Contact Us Today for a Free Consultation