This bill adds a new federal income tax credit aimed at lowering the after-insurance cost of purchasing hearing aids. It creates a statutory vehicle to subsidize hearing-aid purchases through the tax code rather than through direct spending or insurance mandates.
For professionals: the change creates a new compliance item for individual taxpayers and tax preparers, alters how hearing-aid sales may be documented, and will affect employers, insurers, and device manufacturers in how they report coverage and provide receipts. The bill leaves routine implementation details to Treasury/IRS rulemaking, which will determine how taxpayers make the election and substantiate claims.
At a Glance
What It Does
Creates a new, elective credit in the Internal Revenue Code that applies to an individual’s purchase of a hearing aid when that expense is not covered by insurance or other reimbursement. The statute requires an affirmative election and bars claiming the credit more frequently than the statute’s multi-year cycle. It also prevents taxpayers from using the same expense to obtain another deduction or credit in the Code.
Who It Affects
Individual taxpayers who pay out-of-pocket for hearing aids, their dependents when the taxpayer claims them, tax preparers and payroll teams that handle tax elections, and health-device vendors and insurers who supply or reimburse those devices. Treasury and the IRS will need systems and forms to implement the new elective claim.
Why It Matters
This approach uses the tax code to subsidize a medical device rather than expanding insurance coverage, shifting administration to the IRS. The design channels assistance to buyers at the point of purchase but relies on tax-time claiming and rulemaking to define eligibility and proof, creating distinct operational and compliance questions for providers and payers.
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What This Bill Actually Does
The bill inserts a new section into subpart A of part IV of subchapter A of the Internal Revenue Code to create a credit tied to out-of-pocket hearing-aid purchases. The statute sets up the structure: it authorizes a tax credit for qualifying purchases, imposes an income-based exclusion from eligibility, defines what counts as a qualifying device by reference to federal device regulations, requires taxpayers to elect the credit for a given year, and disallows double counting of the same expense under other tax provisions.
Practically speaking, taxpayers will have to make an affirmative election to use the credit for a taxable year and the statute restricts how often that election can be in effect. The bill gives Treasury/IRS the authority to set the timing and manner of that election, which means the agency will decide the form and supporting documentation required.
The law also specifies that the credit applies only to amounts not reimbursed by insurance or other sources, making net out-of-pocket expense the relevant base for the credit.The bill ties device eligibility to existing FDA-regulatory categories: a device must be one of the types identified in the referenced FDA regulations and commercially authorized under the Federal Food, Drug, and Cosmetic Act. The credit can be claimed for devices intended for the taxpayer or for a dependent for whom the taxpayer may claim a personal exemption under the Code (the bill uses the dependent-deduction framework to identify eligible third-party users).Finally, the statute contains a standard clerical amendment to the section table and an effective-date clause limiting application to taxable years beginning after the specified calendar cutoff.
The combination of an election-based mechanism, regulatory device definitions, and a prohibition on duplicate tax benefits shapes how taxpayers, preparers, and payers will establish eligibility and substantiate claims when the IRS issues implementing guidance.
The Five Things You Need to Know
The bill adds new Internal Revenue Code section 25F titled “Credit for hearing aids.”, The credit is capped at $1,000 of qualifying, unreimbursed hearing-aid expense per claim.
Income eligibility is limited: modified adjusted gross income over $300,000 (joint return or head of household) or $150,000 (other filers) disqualifies the claimant.
A “qualified hearing aid” is tied to FDA-regulated device classifications—specifically devices described at 21 CFR 874.3300 and 874.3305 that are authorized for commercial distribution.
Taxpayers may elect the credit only once in any 5-year period; the statute bars making the election for a year if an election is in effect for any of the four preceding taxable years.
Section-by-Section Breakdown
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Short title
Designates the act’s short title as the "Hearing Aid Assistance Tax Credit Act." This is a purely stylistic provision used for citations and has no operational effect on tax administration or eligibility.
Creates the new credit (subsections (a)–(e))
This is the operative change to the tax code. Subsection (a) authorizes the credit for individuals for amounts they paid for a ‘qualified hearing aid’ that were not reimbursed. Subsection (b) places an income-based eligibility screen using a term the bill defines as modified adjusted gross income. Subsection (c) narrows device eligibility to items described in specific FDA regulatory listings and requires that the device be intended for use by the taxpayer or a qualifying dependent. Subsection (d) imposes an election requirement and a multi-year cadence—an election must be in effect and the statute bars repeated elections within a five-year window. Subsection (e) prevents taxpayers from using the same expense to receive another deduction or credit under the Code. For practitioners this single provision combines substantive eligibility rules with administrative restraints that Treasury/IRS must operationalize through regulations and forms.
Updates the table of sections
Adds the new section 25F entry to the subpart A table of sections. This is an indexing change so the statute appears in the proper place in the Code; it has no substantive consequence but is necessary for internal Code organization.
Applies to taxable years after December 31, 2026
The statute applies prospectively to taxable years beginning after the stated cutoff. That places any claims in calendar-year-based planning for 2027 returns and later, and gives Treasury/IRS a definable window to issue implementing guidance before the first year of application.
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Explore Healthcare in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Individuals who pay out-of-pocket for hearing aids: The credit lowers net after‑tax cost of a qualifying device, improving affordability at the point of purchase for eligible taxpayers.
- Dependents of taxpayers with hearing loss: When a taxpayer claims the dependent under the Code, the dependent’s hearing-aid purchase can be the basis for the taxpayer’s credit, broadening household access.
- Tax preparers and CPA firms: These professionals gain new business and advisory work helping clients determine eligibility, make the election, and assemble substantiating documentation.
- Hearing-aid retailers and manufacturers: Clear tax incentive may increase demand and change invoice and certification practices (e.g., providing device regulatory citations and proof of commercial authorization).
- Policy analysts and disability advocates: The tax-credit approach offers a measurable federal subsidy pathway that can be evaluated for cost-effectiveness compared with insurance mandates or direct assistance programs.
Who Bears the Cost
- Federal revenue collectors (IRS/Treasury): The agency will bear administrative costs to design election mechanics, audit rules, forms, and guidance to verify device eligibility and reimbursement status.
- High-income purchasers of hearing aids above the income thresholds: The statute explicitly excludes filers above the set modified-AGI ceilings, leaving them to pay full price or seek other options.
- Employers and insurers: The statute’s requirement that expenses be ‘not compensated by insurance or otherwise’ may require payers to update benefit language and claims reporting to avoid creating ineligible reimbursement scenarios.
- Taxpayers who use multiple tax-preferred mechanisms: Individuals that previously used other Code provisions or pre-tax benefit arrangements may need to reallocate benefit use because the bill forbids double-dipping and is tied to unreimbursed costs.
- Smaller hearing-aid vendors without robust documentation systems: Retailers lacking standardized paperwork may face higher administrative burdens to supply the proof the IRS will require to substantiate a credit claim.
Key Issues
The Core Tension
The central tension is between targeting direct price relief at consumers through a tax-credit mechanism and shifting the administrative burden to the IRS: the bill makes hearing aids more affordable for eligible purchasers but relies on tax-time elections, device-regulatory cross-references, and post-hoc verification rather than front-end insurance coverage—trading immediacy of support for a slower, administratively complex subsidy that requires precise rulemaking to avoid uneven access or gaming.
Implementation depends heavily on Treasury/IRS rulemaking. The statute delegates timing and manner of the taxpayer election to the Secretary and ties device eligibility to FDA regulatory categories; both choices shift critical details out of statute and into administrative guidance.
That delegation is practical—FDA device categories are the sensible technical standard—but it creates a sequence: until IRS publishes rules about how taxpayers will elect and document claims, consumers and vendors will face uncertainty about what paperwork is sufficient, whether receipts must reference the specific CFR classification, and how the IRS will verify commercial authorization.
The bill’s phrase “not compensated by insurance or otherwise” is operationally broad and creates ambiguity. Does employer-provided pre-tax coverage, flexible spending account disbursements, or partial vendor discounts count as compensation that disqualifies the cost?
The statute disallows claiming the same expense under another deduction or credit, but it does not explicitly address the interplay with pre-tax benefit accounts, employer reimbursements, or health savings-account reimbursements—matters that IRS guidance will need to clarify. That ambiguity raises questions about unintended losers (employees who use pre-tax accounts) and creates opportunities for inconsistent application across taxpayers until regulations and audit practices are settled.
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