Deducting Dobbs: The Tax Treatment of Abortion-Related Travel Benefits

Abstract

In 2022, Dobbs v. Jackson Women’s Health Organization overturned both Roe v. Wade and Planned Parenthood v. Casey thereby giving the states carte blanche to do as they wish regarding abortion access. The decision created upheaval in the United States. However, it also provided the impetus for the creation of a new employee benefit, abortion-related travel benefits.

Thirteen states had anti-abortion trigger bans that were unenforceable until Dobbs. Several other states have passed legislation that criminalizes, or significantly restricts, abortion access. Women residing in these states will now endure greater financial, health, and temporal challenges to travel out of state for abortion access. As a result, a profusion of private employers enhanced their mployee benefit packages by providing abortion-related travel benefits. An assessment of the current and potential future tax treatment of such benefits is warranted.

This Article provides past examples of employee benefits that were created around pivotal
United States Supreme Court cases. It then covers women’s need to travel, and the time and expense of such travel, including the disparate impact on women of color and those in lower socio-economic positions. Then this Article focuses on the creativity and swiftness with which companies responded to Dobbs to assist women who will need to travel and the federal income tax treatment of these responses. The Article explores the potential deductibility issues that could arise due to state laws criminalizing abortion and enacting aiding and abetting laws. Lastly, the Article concludes with a discussion on how the government can best proceed equitably.

Keywords: Dobbs, abortion, abortion-related travel, employee benefits, anti-abortion, tax, 162 deduction, 213 deduction, qualified medical expense, Roe