Medical Expense Deduction in Illinois
The federal medical expense deduction allows taxpayers who itemize to deduct qualified out-of-pocket medical costs that exceed 7.5% of their adjusted gross income for tax year 2025. Eligible expenses include premiums not covered by an employer, prescription drugs, dental and vision care, and medically necessary equipment or procedures.
Illinois does not conform to the federal itemized deduction system for state income tax purposes. Illinois uses a flat income tax rate and does not allow a separate state-level medical expense deduction, so the benefit for Illinois residents comes entirely through the federal Schedule A filing.
Illinois residents with high medical costs relative to their income stand to gain the most from this deduction at the federal level. Keeping organized records of explanation-of-benefits statements, receipts, and insurance premium invoices throughout the year is essential to accurately calculate and support the deduction at filing time.