Pet Care Expenses Tax Deduction, Proposed Law
U.S. Congress has Recognized Animals as Family Members
Nov 3, 2009
HAPPY was introduced in Congress on July 31, 2009, as H.R. 3501, by Michigan Representative Thaddeus McCotter. According to Rep. McCotter, underlying purposes of this bill are concerns for promoting humane animal treatment, rewarding positive animal care, and recognizing the animal-human relationship.
The bill is co-sponsored by Representative Steve Cohen of Tennessee and Representative Jared Polis of Colorado.
Basis for the HAPPY Act
As introduced, HAPPY proposes to amend the IRS Code to allow an individual who owns a pet up to $3500 a year in tax deductions for qualifying animal care expenses.
The statement for the proposed law's rationale is simple. HAPPY states: "The Human-Animal Bond has been shown to have positive effects upon people's emotional and physical well-being."
The HAPPY Act has garnered unexpected publicity of mixed response. Some people laugh with disbelief (i.e. not "happy" with the proposal) while others, who either have pets or recognize their importance to people, are more receptive to the notion. Pragmatically, it is another stimulus factor for the economy.
Or is it? Some debate that it is the wrong approach, citing tax credits for pet owners would be a better way to go. Some believe the Act's name trivializes its importance. Few seem to grasp the fact that it is astounding that Congress is considering it at all.
Help for people with pet expenses is not necessarily a new idea, but the HAPPY Act has generated a widespread debate and is creating news. Rep. McCotter's interview about his proposed bill and his motivations for it is viewable on YouTube. He refers to the concept as a "work in progress."
HAPPY is currently sitting in the House Ways and Means Committee and is endorsed by the Pet Industry Joint Advisory Council. As awareness continues to increase, other organizations and individuals are likely to voice their advocacy for the bill.
What many no doubt expected to be a sleeping dog that would never emerge from Committee may prove to be a winning dark horse. In the current climate of economic turbulence and animal advocacy concerns anything is possible. After all, lots of voters own pets. HAPPY's introduction states that according to the "2007-2008 National Pet Owners Survey, 63 percent of United States households own a pet."
Who is a HAPPY Qualifying Pet?
HAPPY proposes to provide the tax deduction for true pets, not business animals. The present definition in the proposed law for a "qualified pet" is "a legally owned, domesticated, live animal." Excluded are research animals or those involved in a trade or business, such as agricultural farm animals that have been subject to another type of tax deduction within the preceding 3 years.
Thus, the law by no means is limited to small animals, or any particular type of animal (depending on the ultimate definition of "domesticated"). Whether it is truly a pet or used for a purpose different than companionship could also become subject to interpretation.
What are HAPPY Qualifying Deductible Expenses?
"Qualified pet care expenses" are "amounts paid in connection with providing care (including veterinary care) for a qualified pet other than any expense in connection with the acquisition of the qualified pet."
HAPPY would provide an individual up to $3,500 per year in deductions on his or her income tax return for these expenses.
Pet owners in need of tax deductions might be interested in following HAPPY. This link to H.R. 3501 includes the ability to track the bill's status in Congress.
Remember, this is just proposed legislation. There is no way to know where HAPPY will go, if anywhere, or what it will look like when it gets there. If the bill passes in some form, it will then be subject to IRS implementing regulations.
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