Dear Gina: It’s summer, it’s hot. Can I purchase an air conditioner and claim it as an eligible expense in my FSA or HSA?
Answer: Well, that depends. Has your doctor told you, or your legal dependent, that the air conditioner will “treat” a specific medical condition? If yes, then maybe. We will, at minimum, require a prescription stating this to accept the claim. But, even still more questions must be addressed. Is the air conditioner to be used primarily by the person who has the medical condition or do others in the household benefit from it? (Maybe the unit is only for their bedroom vs. shared living spaces.) If no, then it gets a bit tricky. Then only the pro rata amount allocable to the person with the medical condition will qualify. E.g. if 4 people live in the house and benefit from the air conditioning, but only one has the medical condition, you can submit 25% of the cost for reimbursement.
Ah, but wait, there’s more. Is it central air conditioning and therefore a home improvement/capital expenditure? If so, only the amount spent that is more than the value added to the property will qualify. How much of the expense would qualify depends on the extent to which the expense permanently improves the property. And what the heck does that mean? It means you’ll be asking your accountant to prepare the paperwork for this determination – you’d most likely be talking to them anyway about what you could deduct for capital improvements. It’s a nice idea, but remember, the Health FSA max is only $2,750 and the burden of proof is on you, so don’t get too many big ideas in your head.