If you don’t already claim your horses as a business, a new bill proposal could allow you to deduct up to $3,500 per year in pet care expenses.
The proposed bill would allow deductions on costs taxpayers incur while providing adequate pet care for their animals but not the purchase cost of pets. Taxpayers can also not write off costs that were deducted under IRC section 162 (ordinary and necessary expenses, including business costs) or section 213 (diagnostic and medical costs not covered by insurance) within the past three taxable years.
Republican Rep. Thaddeus McCotter of Michigan is the primary sponsor of “Humanity and Pets Partnered Through the Years” bill, also known as the “HAPPY Act.”
Legislators have mixed opinions about the bill. While this bill would help many taxpayers - more than half of Americans own pets - opponents of the proposal say pets are optional and shouldn’t be eligible for deductions.
So are horses included in the HAPPY Act? Animals owned by or used for business or medical research are not considered qualified pets so if you already write of horse-related expenses for business this bill won’t necessarily increase your deductions. The bill defines a “qualified pet” as:
“a legally owned, domesticated, live animal”
To read a copy of the bill click here.
So does this mean horses are considered “qualified pets”? What does everyone think of this legislation and its impact on horse owners? Would your horses qualify?
Wouldn’t that be nice! For me anyway!
Actually, this would not be nice, as horses that are tax deductible are normally considered livestock and now they want to rename them as “pets”. Sounds good, but then guess what, pets are treated much differently by law than are livestock. This is a PETA agenda to get into our pets’ lives. I don’t like it, smells fishy.
There has been a lot of concern regarding that, Mary. The common question seems to be, “What will they want to control in return for this tax break?” i.e. Registering with NAIS, stricter regulations, etc. Another concern is that it might encourage those with irresponsible animal care practices to have more animals. i.e. Will pets covered be required to be spayed or neutered? It’s definitely a hot-button issue amongst legislators and pet owners.