Doctors of Natural Medicine

Can Medical Marijuana Be Claimed on Taxes?

Due to the recent growth in marijuana dispensaries, people have started to wonder whether the products’ costs can get deducted from their taxes.

So, can medical marijuana be claimed on taxes?

Can Medical Marijuana be Claimed on Taxes?

Is Medical Marijuana Tax Deductible?

When it comes to the question of: is medical marijuanas tax deductible, users of marijuana may be dismayed to hear that the cost of obtaining the substance, regardless of whether you did it for a medicinal or recreational purpose, is not eligible for a tax deduction. Medical cannabis is not tax deductible for government reasons under current laws.

The Internal Revenue Service, or IRS, a division of the Treasury Department, has stated that it does not have the administrative authority to implement regulations that allow marijuana-related discounts as federal law continues to prohibit cannabis.

In addition, the commissioner of examination for the IRS Small Business/Self Employed (SB/SE) Division recently gave a speech regarding tax-related concerns in government marijuana markets. In his remarks, he stated that even though federal law prohibits medical marijuana, businesses that deal with the controlled substance are still required to file federal taxes. Therefore, the IRS is here to assist them.

So, is medical marijuana tax deductible for businesses that carry it? Possibly.

Medical Marijuana Tax Return

is medical cannabis tax deductible

Some taxpayers get required to include medical marijuana tax on their returns even though it is not legal yet. Even though the federal government views operating a marijuana dispensary as unlawful, the IRS maintains that any business that does so according to the state’s laws is subject to the same tax filing responsibilities as any other business.

Any forms of income are subject to taxation. Since a long time ago, the Supreme Court has maintained its position that income derived from illicit origins is taxable and cannot be exempt from tax. In more recent times, the Internal Revenue Service’s rulings that state-compliant marijuana businesses have taxable income have already gotten repeatedly upheld by state judges.

According to federal law, there is no doubt that profits made from the sale of marijuana are subject to taxation. Even though marijuana merchants get forced to shoulder the financial burden of federal taxation, no benefit from the provisions of federal tax law is guaranteed.

In the 1980s, officials amended the Internal Revenue Code to include Section 280E, which states that “no exemption or credit shall be permitted for any payment made or imposed during the taxable year in holding on a business or trade if such trade or business includes of smuggling in controlled substances.” Therefore, while most firms can deduct all of their regular and essential expenses, this is not the case for organizations that deal with marijuana.

The Internal Revenue Service enables taxpayers to deduct unreimbursed medical expenses from their taxable income if the sum of those expenses exceeds 10 percent of their income after adjustments. If there is a prescription for a medicine or drug, the cost of purchasing that medicine or drug can typically get deducted from one’s taxable income. However, the use of marijuana for medical purposes is a whole different matter.


So, is medical marijuana a tax deduction? The answer is no. As long as medical marijuana gets prohibited under federal law, you cannot claim it on taxes.

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