The deduction for medical expenses under Section 213 states that there shall be allowed as a deduction for expenses paid for medical care of an individual as well as that individual’s spouse, qualifying child of the household, or qualifying relative as determined under Section 152. However, in referencing Section 152, it makes a modification by adding the clause: "determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof." The reference to "(b)(1)" is the statutory provision that disallows a dependent of another from claiming their own dependents. The reference to "(b)(2)" is the statutory provision that declares that you generally cannot claim someone as a dependent if they're married subject to certain income rules. The reference to "(d)(1)(B)" is the statutory provision that requires a qualifying relative to have income less than the personal exemption amount; $4,200. In other words, Section 213 extends the medical expenses you can deduct to individuals not listed on your tax return as dependents. More specifically, it expands medical deductions those individuals that would be dependents but for "subsections (b)(1), (b)(2), and (d)(1)(B)." In other words, this requires statutory reconstruction.
Now, we know what dependents qualify under Section 152: qualifying children and qualifying "relatives." We also know that the statutory definition of a "relative" can include anyone, including an entirely unrelated person as long as that person lived with you for more than 183 days. This can include a girlfriend, boyfriend, or best friend. We also know that, as applied to a person related to you by blood, marriage, or law, the individual does not actually have to live with you; the law only requires that you provide more than half of their support and that the person make less than $4200 in order to claim the person as a dependent.
The full scope and power of Section 213, however, is only realized when you apply the statutory modification to Section 152. Section 213(a) instructs us to disregard "subsections (b)(1), (b)(2), and (d)(1)(B)" of Section 152. In doing so, a qualifying relative, such as a parent, can make more than $4200. Thus, as long as you provided the majority of their support, you can claim medical expenses you paid for them even though they're not actually listed on your tax return as a dependent.
In other words, as long as (1) the individual is related to you by blood, marriage, or law and (2) you provide the majority of their support, then you can claim as a deduction all medical expenses you paid for them.
So let's provide some examples to really drive the point home. Let's first start with the most common scenario, which is going to involve a taxpayer's parents.
Section 213 disregards the income of a “qualifying relative,” but it still takes into account whether you provided more than one half of that person's support during the year. This was added because it is typical for elderly parents to have social security income, so Congress did not want their Social Security income to inhibit the ability of a child to claim a deduction for the medical expenses paid.
Example 1. Mother and father are retired and living in Scotland. Their son lives and works in New York City. Their son pays all of their medical expenses. If the son can establish that he provides more than half of their support, then, despite the fact that he lives thousands of miles away in a different country, he may claim a deduction for all of the medical expenses he paid for his parents even though he does not claim them as dependents and his parents file their own separate tax return.
Example 2. Joanna and Alicia are best friends. Alicia becomes terribly ill in February, loses her job in March, is evicted from her apartment in April, and has no family to depend on. Joanna lets Alicia move into her home in May. Alicia stays until December when she recovers, finds a job, gets her own apartment again, and moves out. Alicia lived with Joanna for more than 183 days. During her stay, Joanna paid $8,000 in medical expenses for Alicia as well as other living expenses. However, Alicia had income in January, February, and December, so she files her own tax return. Joanna does not claim her as a dependent since Alicia made more than $4200. Nevertheless, Joanna is able to prove she provided more than half of Alicia's support throughout the year; therefore, Joanna is entitled to claim all of the medical expenses she paid for Alicia even though Alicia files her own tax returns, moved out before the end of the year, and was not formally claimed as a dependent on Joanna’s tax return.
See Jewell v. C.I.R., 69 T.C. 791 (1978), acq. rec. by IRS AOD 1978-78 (Mar. 22, 1978).