• A Taxpayer suffered from Migraine Headaches. Her Doctor prescribed an herb to treat her headaches, and the taxpayer sought reimbursement from her FSA account for the cost of the herbs.

Ruling: For the Taxpayer! An FSA can generally reimburse only an expense primarily for medical care, per the Internal Revenue Code §213 (d) Eligible Medical Expenses. But, naturopathic care, such as herbs, can qualify as a reimburseable medical expense if the taxpayer establishes that he or she:

  1. has a medical condition;
  2. is purchasing the herb to treat or alleviate the medical condition; and
  3. would not have purchased the herb if the individual had not been diagnosed with the medical condition.

AIPB TIP: It’s a good idea to have something in writing to indicate that the doctor believed the treatment was medically necessary.

The preceding passage is from the American Institute of Professional  Bookkeepers (AIPB) August edition of their newsletter called, 'The General Ledger.'