Cord blood banking is a process of storing blood from a newborn child's umbilical cord. This blood contains stem cells that can be used in medical treatments for conditions -- such as cancer, blood disorders and immune diseases -- that your child may have or develop later in life, even in adulthood. As of publication, cord blood banking costs may be tax deductible, but only in a particular situation.
What the Law Says
The Internal Revenue Service permits you to deduct medical expenses if your total medical expenses for the year exceed 10 percent of your income. Under the law as of publication, cord blood banking may be considered a medical expense, but only if your child has a medical condition that may be aided with treatment using cord blood. If you want to bank cord blood for a healthy child, in case of future ailments, it is not tax deductible. However the Family Cord Blood Banking Act was introduced to Congress in 2013. The bill, if passed, would make cord blood banking a qualified medical expense, meaning that you could deduct it against your taxes.
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