New Tax Credit Offers Up to $40,000 Annually for IVF and Fertility Treatments

The newly proposed IVF Access and Affordability Act zeroes in on one of the biggest financial hurdles facing people trying to start a family: the staggering cost of fertility treatments. This bill doesn’t mess around; it creates a brand-new tax credit—the Fertility Treatment Tax Credit—that directly offsets what you pay for Assisted Reproductive Technology (ART) expenses, starting in the tax year after it becomes law (SEC. 2).

The Fertility Treatment Sticker Shock Discount

This isn't a small deduction; it’s a credit, which is much better for your wallet. The credit is equal to the amount you spend on ART, but it comes with some hard caps. For single filers, the maximum credit you can claim in one year is $20,000. If you’re married and filing jointly, that cap doubles to $40,000. To put that in perspective, a single cycle of IVF often costs $15,000 to $30,000 out-of-pocket, so this credit could dramatically reduce the financial burden of one or two cycles (SEC. 2).

Who Gets the Full Benefit?

Like most tax breaks, this one has income limits designed to focus the benefit on middle and upper-middle-class families. If you’re a single filer, the credit starts to phase out once your Adjusted Gross Income (AGI) crosses $200,000. For married couples filing jointly, the phase-out starts at $400,000 AGI. This means that if you’re pulling in a very high income, the credit will shrink or disappear entirely. For instance, a software engineer couple making $450,000 might see their $40,000 credit reduced, while a teacher and a nurse making $180,000 combined would likely get the full benefit (SEC. 2).

Avoiding the Double-Dip Dilemma

There are two crucial rules here that prevent taxpayers from getting a windfall. First, you cannot claim this credit for any ART expense that was already paid for or reimbursed by insurance or any other source. If your employer’s health plan covers 50% of your $30,000 IVF treatment, you can only claim the credit on the remaining $15,000 you paid out-of-pocket. Second, you can’t claim the credit for expenses you already deducted elsewhere on your taxes (SEC. 2). This keeps the system clean and ensures the credit only covers true out-of-pocket costs.

The Five-Year Safety Net

One of the smartest features for people undergoing treatment is the carry-forward provision. Fertility treatments often involve multiple cycles over several years, and sometimes people have a great year of spending but a low tax liability. If the credit you qualify for is more than you can use in the current tax year, you can carry that leftover amount forward for up to five tax years (SEC. 2). This is a huge relief, ensuring that the benefit isn't wasted just because your income fluctuates or you hit other credit limits.