Most of what intended fathers spend on surrogacy is not a deductible medical expense under current federal guidance. Some fertility procedures performed on the taxpayer, a spouse or a dependent may qualify, but the surrogacy-specific components generally do not.

What IRS Publication 502 actually says

Publication 502 describes which medical expenses can be included when itemizing deductions. It treats certain fertility-enhancement procedures performed on the taxpayer, spouse or dependent as includable. It then specifically excludes amounts paid for the identification, retention, compensation and medical care of an unrelated gestational surrogate. For a two-father family using an egg donor and a gestational carrier, that exclusion covers a large share of the total spend — carrier compensation, carrier medical care, and the agency work involved in finding and retaining her.

That is the rule as published. It is not a statement about whether surrogacy is worthwhile, and it is not a permanent settlement of the question.

Where it gets fact-specific

The treatment of other line items is less clear cut and depends on your facts. Sperm testing and freezing, IVF procedures performed on a taxpayer, egg-donor fees, legal fees, escrow administration and travel have all been argued about, and the answers turn on who the procedure was performed on, what the payment was actually for, and how it is documented. Two couples with similar-looking invoices can land in different places.

Private letter rulings are not your precedent

You may see coverage of an IRS private letter ruling that allowed a particular taxpayer a particular treatment. A private letter ruling applies to the taxpayer who requested it. It is not generally citable precedent for anyone else, and it should not be the basis on which you file. Read it as a signal that the area is contested, not as permission.

Employer benefits, HSA and FSA

Separate questions, and worth asking early:

• Does the employer plan include a fertility or family-building benefit, and does it recognize your family structure?
• Is there a lifetime maximum, and does it cover donor or surrogacy components?
• Does the plan require a specific clinic or agency network?
• Are reimbursements treated as taxable income to you?
• Is there an adoption-equivalent benefit that applies?
• What documentation and claim deadlines apply?

HSA and FSA reimbursement follows the same underlying question of what counts as a qualified medical expense, so the surrogate-related exclusion matters there too. Do not assume an administrator's initial approval settles it.

Keep the records either way

Whether or not anything ends up deductible, keep clean records: itemized invoices that distinguish who the service was performed on, escrow ledgers, legal fee statements and benefit claim documentation. If a tax professional later determines something qualifies, the documentation has to already exist. Reconstructing it after the year closes is much harder.

What to do

Talk to a tax professional who has handled third-party reproduction, before you file and ideally before you spend. Bring the itemized budget rather than a total. Ask specifically about the Publication 502 exclusion, about HSA and FSA treatment, and about whether employer reimbursements will be taxable to you.

This article is general information, not tax advice. It has not been written for your return. For how the underlying spending is structured, see our cost breakdown, and reach us through contact if you want help assembling the documentation your accountant will ask for.