A new IRS ruling could make it more affordable for consumers to get a DNA test done through the company 23andMe, according to the Wall Street Journal that first reported a new ruling that lets consumers get a tax break on parts of the test. Consumers will not be able to get a tax break on the entirety of the test, as the IRS doesn’t feel that genetic history is considered a health cost. However, those that purchase additional health information from the company may be eligible to use a flexible spending account to pay for access to the information.


Right now 23 and Me is the only consumer facing genetics testing company that the FDA has authorized to be marketed to consumers medical devices. The kits are eligible to be marketed as medical devices because 23andMe offers medical history information and insight into possible genetic conditions in addition to the ability to show genetic background and demographic information. Other competitors simply offer a look into how your genetic makeup shows where your ancestors come from, while 23andMe shows a complete genetic profile that includes things like haplogroups, health information, and inherited traits.

The company was founded back in 2006 but did not make it into the forefront of consumer facing goods until quite a few years later. Today, millions of consumers have taken at-home DNA tests from either 23andMe or its competitors. The FDA agreed to let 23andMe advertise its product as a medical device only if it created an additional feature in the test that lets users look at their likelihood of developing genetic diseases such as muscular degeneration or Parkinson’s disease. Additionally, research features within the platform can help tell consumers trivial traits like whether or not they have an aversion to cilantro or detached earlobes.

Being able to get a tax break or use a health plan to pay for a 23andMe DNA test has some stipulations. Anyone that purchased the testing kits after January 1, 2019 may be eligible to have a portion of the cost deducted by their health savings plan or flexible spending account to pay for up to $117.74 of the total $199 retail price. That is, if the consumer purchased the additional health kit information in addition to their basic health kit. Since the deduction is based on what the total cost of the kit is, the price will also change based on whether or not the consumer purchased the kit while it was on sale or at a discount. If you purchased a DNA test and health kit for $150 instead of $199, for example, you probably won’t be able to get the full $117.74 discount.

Incentives To Get One Test Over Another

23andMe hopes that the new IRS ruling will encourage consumers to purchase its testing kit over its competitors. Many consumers purchase a DNA testing kit assuming it can tell them the same information, not understanding that only 23andMe offers the health information benefits that can tell an individual whether they’re predisposed to one genetic disease over another.