Can You Claim Pets on Taxes?

According to the American Pet Products Association, Americans collectively spent a total of $136.8 billion on pets in U.S. in 2022. For most, having a pet as a member of the household or workplace plays an important role in everyday life, but it may also feel like caring for a dependent. While pets cannot be claimed as dependents on your tax return, certain circumstances may be available to you.

Pet owners can find relief in the form of tax deductions. The IRS allows pet owners to take pet-care-related deductions for service animals, animals that work for a business, performance animals and foster animals.

Understanding all the deductions and tax breaks that may be available to you as a pet owner is key to reducing some of your tax burden. It’s important to keep detailed records of your pet-related expenses to ensure a simple process when writing off those expenses during tax season.

Service animals are common for people with physical disabilities or diagnosed medical conditions, such as epilepsy, blindness and post-traumatic stress disorder.

As a pet owner of a trained or certified service animal you are allowed to deduct costs related to the care as medical expenses on Schedule A (Form 1040). Other expenses that may be deductible are training classes, grooming services, food, supplies, transportation costs, pet insurance and veterinary care to ensure that your animal is healthy to assist you.

Keep in mind, the Americans with Disability Act (ADA) doesn’t allow tax deductions for emotional support animals (ESAs), which are animals that provide comfort and aren’t trained or certified.

If you have a business and your animal works for your business, then pet-related expenses may be deductible as a business expense.

For example, you may be able to claim a deduction if you use a guard dog to protect your business premises or have herd dogs working on your farm to herd livestock.

You would need to prove that the animal is “ordinary and necessary” in your business operations to qualify. You can get a tax deduction for having working animals in your business for expenses such as training classes, food, supplies, medical care, grooming services, pet insurance and boarding fees.

Keep good records of these expenses and the time your animal spends working at your business as evidence to claim these deductions. A deduction for these expenses only applies to the animal’s working hours.

When your pet or animal generates your income, you may be able to deduct them as a business expense. Examples of performance animals include those featured in advertising, television shows and movies. In addition, if you run an animal breeding business and have animals for sale, then you could deduct the pet-related expenses for that as well.

Expenses that can be deducted are training, food, supplies, veterinary care and boarding. Be mindful that if your business doesn’t yield a profit in at least three of five consecutive years (or at least two of the last seven years for activities that consist of breeding, showing, training or racing horses), the IRS may classify it as a hobby and prevent you from claiming a loss related to the business.

For animal lovers, fostering pets is a great way to provide service to charitable organizations, but it requires you to spend additional money. However, unreimbursed expenses related to the care of foster pets may be deductible on your tax return to help relieve some of the financial burden.

These expenses qualify as charitable contributions and are deductible up to 60% of adjusted gross income to 501(c)(3) qualified charities, depending on the type of contribution and charity.

Any money donated to an animal charitable organization can be deducted as well.

Be sure to keep track of your mileage, hold on to your receipts, and keep detailed logs of donations, including names of charitable organizations and descriptions of donations as proof.

According to findings from the American Veterinary Association (ASCPA), the average total pet care costs in 2021 was $1,391 for a dog and $1,149 for a cat. The ability to write off some of those pet care costs can provide relief depending on the circumstances. Other pet-related deductions can come from moving and medical expenses.

Moving expenses related to pets may be tax deductible if your move is job-related or if you own a pet-related business. The IRS allows you to deduct pet transport costs, lodging fees and carrier costs of shipping your pet to your new home.

But as of 2018, under the Tax Cuts and Jobs Act (TCJA) the tax rules changed for deducting job-related moving expenses, allowing only military members moving expense deductions on Form 3903. Prior to the tax law change, all pet owners could take deductions for moving expenses under a few conditions.

In contrast, there are no rules to claiming these expenses on a business return in a pet-related business.

Medical expenses may be deductible on your tax return if you have a certified service animal. You can deduct for animals that perform specific tasks such as retrieving bags with medication, assisting you with walking or picking up items, opening doors, turning on/off lights or calming you when you have anxiety.

The IRS allows you to deduct pet medical insurance and costs for the care of a service animal as medical expenses if your total medical expenses exceed 7.5% of your adjusted gross income. This must be presented as an itemized deduction on Schedule A of your Form 1040 tax return.

To claim a tax deduction, be sure to keep documentation that your service animal is certified and trained for treatment of your specific illness. It’s important to have a doctor’s prescription that proves the service animal is medically necessary.

A pet trust is a trust created in retirement or estate planning that allows a pet owner, also known as the “grantor,” to leave money for the care of their pet in the event of the owner’s death.

It appoints a trust company, family member or other individual as the “trustee” who arranges the proper care of the pet. The pet trust also names a caretaker, beneficiary or shelter organization to take possession of the funds to care for the pet and pay for pet expenses.

The pet owner has the option to create a pet trust as either a living trust or a testament trust as part of the will for when the owner dies. Pet trusts are important for tax purposes because in a testamentary trust, the assets may be affected by estate taxes under IRS federal estate and gift tax rules.