Exploring the Tax Implications of Ozempic and Wegovy: What You Should Consider

Two medications – Ozempic and Wegovy – are generating significant attention in the media. 

Ozempic (generic name Semaglutide) is a drug to help treat type 2 diabetes. According to their official website, Ozempic, “is proven to lower blood sugar and A1C when used along with diet and exercise.” In addition, it “lowers the risk of major cardiovascular events such as stroke, heart attack, or death in adults who also have heart disease” and “lowers the risk of worsening kidney disease, kidney failure (end-stage kidney disease), and death due to cardiovascular disease in adults who also have chronic kidney disease.” However, Ozempic, which received approval from the Food and Drug Administration for treating diabetes in 2017, cautions the drug “is not a weight-loss drug” but it “may help you lose some weight.” 

Wegovy is an injectable prescription medication containing the same ingredient as Ozempic (semaglutide). Wegovy’s website states it “may help adults and children aged ≥12 years with obesity,”or some adults who are overweight and have weight-related medical problems. It can help those struggling with these issues to  lose weight and keep it off.” They also recommend users should implement a reduced-calorie meal plan and increased physical activity while taking the once-weekly medication.

With Ozempic and Wegovy being a hot topic lately, you may be wondering when and if you can deduct the costs of the drugs on your taxes.

If I use Ozempic to treat diabetes, can I deduct the cost on my taxes? 

If you itemize your deductions, you may be able to deduct expenses you paid that year for medical and dental expenses for you and your family (spouse and dependents) – including the out-of-pocket cost of your prescription Ozempic for your diabetes. But it’s important to note that you can only deduct the amount of your total medical expenses that exceed 7.5% of your adjusted gross income (AGI). For instance, if your adjusted gross income was $50,000 your medical expenses would need to be more than $3,750 ($50,000 x 7.5%). 

If I use Ozempic for weight loss, can I deduct the cost on my taxes?

Although Ozempic is not approved by the FDA for weight loss, many people are taking it to lose weight and in some cases physicians are prescribing it for weight loss. According to the IRS, weight loss programs just for the sake of losing weight are not deductible unless the program treats a specific disease diagnosed by a physician like obesity, diabetes, hypertension, or heart disease. If your doctor prescribed Ozempic to help lose weight to treat a specific disease then you may be able to deduct your cost if you itemize your deductions.

If I use Wegovy, can I deduct the cost on my taxes?

The Food and Drug Administration approved Wegovy to treat obesity and to treat weight-related conditions like high blood pressure and diabetes. If your doctor prescribes Wegovy to treat a specific disease like obesity, diabetes, hypertension, or heart disease, then you can deduct the cost on your taxes as long as you itemize your deductions and the costs are more than 7.5% of your adjusted gross income. However, if you purchase Wegovy because you want to start dropping some pounds, then you will not be able to deduct it.

What are medical care expenses? 

The IRS defines medical care expenses as “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.” 

What medical expenses are tax deductible?

Generally, medical expenses will vary and some examples include but are not limited to the following: 

• Payments for fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners
• Payments to participate in a weight-loss program for a specific disease or diseases diagnosed by a physician including obesity. Note: this does not include ordinary payments for a diet food item or payment for your gym or health club dues.
• Payments for insulin and for drugs that require a prescription for its use 

How do I qualify for the medical expenses deduction? 

To take a deduction for medical expenses on your tax return you must itemize your expenses and your total eligible medical expenses must exceed a certain threshold. The threshold is 7.5% of your adjusted gross income (AGI). That means you can take a deduction for the amount of medical expenses that exceeds 7.5% of your AGI. 

Don’t worry about knowing these tax rules. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. 

Get started now