Stephanie Hunter McMahon (Cincinnati), Using the Tax System to Ease Some of the Dobbs Hardship, 176 Tax Notes Fed. 1105 (Aug. 18, 2022):

Through Dobbs, the Supreme Court has ensured that many women throughout this country won’t have access to abortion in their home states. Even before Dobbs, however, many states had extremely limited access to this medical care. For many women to exercise their fundamental human right to abortion and attendant healthcare, it has been necessary that they travel sometimes hundreds of miles and often pay significant sums. That cost is an economic hardship in addition to the other hardships imposed by states that refuse to recognize a woman’s right to an abortion.

This article doesn’t have an answer for the Dobbs decision; it merely provides information about the resources in the IRC to help those with limited access to abortion.

First, a taxpayer can claim a deduction for her medical expenses, including the cost of travel to a different state. Second, charities can receive tax-deductible contributions to provide services to transport someone to receive an abortion in a state where it is legal. Third, women can fund abortions through flexible spending arrangements under cafeteria plans, Archer medical savings accounts (MSAs), or health savings accounts.

For those who can claim those tax benefits, the IRS is legally required to keep tax filings confidential, even from other government entities including state prosecutors, unless specifically required to do so by Congress. To date, Congress doesn’t permit disclosure for criminal prosecution purposes, a fact the IRS tries to make clear to taxpayers. Despite the privacy in claiming these resources, these tax provisions will likely be of limited value to many women who will suffer as a result of Dobbs.

This article also calls on employers and Congress to use the tax system to help redress the inequities the Supreme Court has created. Through employers’ provision of insurance that covers abortion and related transportation costs, employees can receive assistance without being required to pay income and employment taxes on the value of that assistance. Employers can also deduct their cost of this insurance. Also, through the 2023 budget reconciliation process, Congress should enact a refundable tax credit to cover the costs, including the transportation costs, of seeking medical care that isn’t available within some reasonable distance, perhaps 60 miles, of the taxpayer’s residence.

It is incumbent on everyone to address the lack of appropriate medical care in some of our United States. Some of that lack of care is the result of finances. Between 2017 and 2020, median patient charges increased for medication abortions (abortion pill) from $495 to $560 and first-trimester procedural abortions from $475 to $575 even as second-trimester abortions decreased from $935 to $895. Only 80 percent of facilities accepted insurance, and in many instances, insurance chooses not to or is prohibited from covering abortions. Ancillary costs, including travel-related but also lost wages and child care, average $140. Dobbs will result in those costs increasing significantly for many women, especially if they travel to states with waiting periods.

Even before Dobbs, the cost is too great for many women. The Federal Reserve found that nearly one-quarter of Americans couldn’t pay for a $400 emergency and, therefore, are unable to pay for the lowest-cost abortion. Of those who have abortions, studies find that more than 40 percent were below the poverty line and an additional 25 percent were between 100 percent and 199 percent of the poverty line. The tax system isn’t the best means to help women, but it can be used to help mitigate the harms that are being inflicted.