54A:3-3. Medical expenses. (a) Each taxpayer shall be allowed to deduct from the taxpayer’s gross income medical expenses for the taxpayer, the taxpayer’s spouse, and the taxpayer’s dependents with respect to such expenses that were paid during the taxable year and to the extent that such medical expenses exceed 2% of the taxpayer’s gross income. In the case of a nonresident, gross income shall mean gross income which such nonresident would have reported if the taxpayer had been subject to tax during the entire taxable year as a resident.

(b) Special Rule for Decedents.

(1) Treatment of expenses paid after death. Expenses for the medical care of the taxpayer which are paid out of the taxpayer’s estate during the one-year period beginning with the day after the day of the death shall be treated as paid by the taxpayer at the time incurred.

(2) Limitation. Paragraph (1) shall not apply if the amount paid is not allowable as a deduction in computing medical expense deductions for federal income tax purposes.

(c) Disallowance of amounts allowed for other purposes.

(1) Any expenses allowed as a deduction of expenses for household and dependent care services necessary for gainful employment shall not be allowed as an expense paid for medical care for purposes of this section.

(2) Any amounts paid or distributed out of a medical savings account that are excluded from gross income pursuant to section 5 of P.L.1997, c.414 (C. 54A:6-27) shall not be allowed as an expense paid for medical care for purposes of this section.

(3) Any amounts allowed as a deduction for the health insurance costs of the self-employed pursuant to section 1 of P.L.1999, c.222 (C. 54A:3-5) shall not be allowed as an expense paid for medical care for purposes of this section.

L.1976, c.47, s. 54A:3-3; amended 1997, c.414, s.2; 1999, c.222, s.2.