Are you considering using your Flexible Spending Account (FSA) to purchase medical marijuana? FSA funds cannot be used for medical marijuana, but there are alternatives that may help you to access the care you need. Learn more about why medical marijuana is not FSA-eligible and explore some of the ways you can access your medical marijuana without draining your FSA.
Is Medical Marijuana FSA Eligible?
Unfortunately medical marijuana is not eligible to be purchased with funds from a Flexible Spending Account (FSA). The details of an FSA are regulated and overseen by the IRS, and must follow a specific set of guidelines. The IRS does not allow medical marijuana to be purchased with an FSA, which means that as much as you may want to use your FSA funds to cover your medical marijuana expenses, you won’t be able to do so.
There are a few alternatives you can use if you’d still like to take advantage of the tax savings on your medical marijuana expenses. One is to open a Health Savings Account (HSA) instead of an FSA.
HSAs are similar to FSAs, but are only available to those who are enrolled in a high-deductible health plan.
With an HSA, you can use the tax-free funds to pay for medical marijuana, as well as for other medical expenses. Another option is to look into state-level tax breaks for medical marijuana. Some states have tax credits available for medical marijuana, which can help to offset the cost of your medications.
Some states have programs that subsidize the cost of medical marijuana, making it more affordable. Check with your state’s taxation office to find out what tax breaks are available to you.
Why Medical Marijuana is Not FSA Eligible
Medical marijuana is not currently FSA eligible due to the fact that marijuana is still classified as an illegal substance under federal law. Despite the fact that many states have legalized the use of medical marijuana, the federal government has not yet done so, which means that any purchase of medical marijuana still falls outside of the scope of what can be purchased with an FSA. Any purchase of medical marijuana using an FSA will not be reimbursable, and could even subject the user to legal action.
An important thing to remember is that the IRS has issued guidance stating that any purchase of an illegal substance, including medical marijuana, cannot be made with an FSA.
This means that no matter what state you’re in, if the drug is not legal under federal law, then it cannot be purchased with an FSA. If you are considering using an FSA to purchase medical marijuana, it is important to understand that it is not an eligible expense.
The good news is that there are alternatives for purchasing medical marijuana that do not involve the use of an FSA. Many states allow for the purchase of medical marijuana with cash or other forms of payment. Some states also allow for the use of debit cards or credit cards to purchase medical marijuana. There are also some states that have implemented their own medical marijuana programs, which allow individuals to purchase medical marijuana with a valid ID card.
Alternatives to Using FSA for Medical Marijuana
If you need to purchase medical marijuana but can’t use your Flexible Spending Account (FSA), there are still ways you can cover the costs. Depending on the state you live in, you may be able to use a Health Savings Account (HSA) to pay for medical marijuana.
HSAs are similar to FSAs in that they also allow for pre-tax purchases of medically necessary items. Some states offer subsidies or programs to help lower the cost of medical marijuana. It is worth researching what kind of assistance your state offers.
Another option is to use a CareCredit card.
CareCredit is a special type of credit card that can be used for medical expenses. CareCredit covers more than medical marijuana, so it can be helpful if you have other medical bills to cover. CareCredit may offer promotional financing options with low interest rates, so it’s worth looking into this option if you need to purchase medical marijuana.