That's Eligible?! How FSAs can benefit you and your service dog

As someone who recently adopted a dog, I can admit that I fall prey to the "dog mom" stereotype. Whether it's splurging on high-quality dog food, buying doggie t-shirts or even rushing my pup to the veterinary office when she ingested a raisin (true story), it's safe to say that I consider my dog a member of the family...and I have the receipts to prove it.

(To me, she's worth the expense.)

But here's the deal—even though she increases my happiness, my dog isn't a companion animal or service animal. She's a regular pet (who does things like steal food and dig through couches). Because of that, I can't use my FSA to pay for her expenses.

But if you have a working animal—whether it's a companion animal or a fully trained service animal—you might be able to use your FSA to pay for the pet's care and upkeep.

In honor of National Dog Day on August 26, let's take a deeper look at everything you need to know about how your FSA might be able to benefit you and your best friend.

Service animal vs. companion animal

Companion dogs and service dogs are working animals. Whether they assist with a diagnosed mental illness or help with a physical disability, companion dogs and service dogs serve a specific purpose that's associated with a diagnosed health issue.

The primary difference between a service dog and companion dog is that service dogs assist with physical disabilities while companion dogs assist with mental disabilities.

Service animals

Service dogs are specially trained to assist with various physical disabilities. This could include a service dog who provides mobility assistance for people with challenges like arthritis, paraplegia, stroke or amputation.

Hearing dogs -- animals trained to lead their hard-of-hearing owners to the source of a sound -- and guide dogs -- animals trained to to lead blind and visually impaired people around obstacles -- are also considered service dogs.

Service dogs are covered under ADA regulations, which means that businesses and institutions cannot refuse entry to people with guide dogs or service animals.

The IRS makes it clear that "you can include in medical expenses the costs of buying, training, and maintaining a guide dog or other service animal to assist a visually impaired or hearing disabled person, or a person with other physical disabilities."

Companion animals

Companion animals fall into two primary categories: dogs that are trained to assist with individual mental health needs (this includes conditions like anxiety, depression, bipolar disorder and other psychological disorders) and dogs that are trained to provide comfort, support or therapy to patients in hospitals, retirement homes and other public or private locations.

Here's what the IRS has to say about companion animals: "The costs of buying, training, and maintaining a service animal to assist an individual with mental disabilities may qualify as medical care if the taxpayer can establish that the taxpayer is using the service animal primarily for medical care to alleviate a mental defect or illness and that the taxpayer would not have paid the expenses but for the disease or illness."

There are a few factors at play when it comes to whether or not your dog qualifies as a companion animal:

  1. The dog must be necessary for your health. This typically means that you have a specific, diagnosed health issue that the dog assists with, or in the case of a therapy dog, it means that the dog has a specific job.
  2. The dog's primary purpose is to help with your health.
  3. If it weren't for your health needs, you wouldn't have had to spend money on the animal.

Expenses associated with companion dogs may be eligible for reimbursement with your FSA, HSA and HRA, but you'll likely need a letter of medical necessity (LMN) from your doctor. A LMN is different than an emotional support animal letter (ESA), and just because you have an ESA doesn't guarantee that you'll qualify for a LMN.

It's about your health

Your FSA and HSA are designed to assist you with your medical expenses and health needs. If you or, your spouse, or your dependent need a service dog or companion dog for health reasons, then it might be a great idea to use your FSA or HSA to get reimbursed for medical expenses, care and food associated with your dog.

But if you have a regular pet, then their and upkeep are not related to your health needs and the expenses associated with your pet wouldn't qualify for reimbursement. But if you're anything like me, your dog is probably worth the extra expense.


Don't waste time hunting for ways to spend your tax-free funds. In That's Eligible?!, we'll bring you these updates every Monday, so you don't have to. And for all things flex spending, be sure to check out the rest of our Learning Center, and follow us on FacebookInstagram and Twitter.

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