Pet Owner? The HAPPY Act Might Bring you Tax Deductions
Could your Pet Bring you a Tax Deduction?
Who’s a good boy? Yeah, that’s him right there. My shelter dog, Murdock, A Nova Scotia Duck Tolling Retriever. And he’s about to become an even better boy should the recently introduced HAPPY Act gain traction and get passed.
What is the HAPPY ACT?
HAPPY is an acronym for The Humanity and Pets Partnered Through the Years Act. Also known as House of Representatives Bill 3501. The Happy Act was introduced by Representative Thaddeus McCotter, a Republican from my home state of Michigan.
Should the HAPPY Act pass in its present form, it would allow pet owners to deducted the cost of food, veterinary care, and other pet related expenses from their income taxes – up to $3,500 per year.
How Much Could the HAPPY Act Save you?
My dog Murdock, with me
I had spent $700 this year on veterinary expenses for my dog Murdock and my cats – Bean and BA. This is probably more than a typical year for me as a lot of that expense was first visits after rescuing a dog from our local humane society and bringing him back to health. I estimate that I’ve spent $600 this year on food and medicine. My total cost of ownership was roughly $1,300 for my three pets.
Somehow Americans spend an average of $1,700 per year per pet. I managed to keep my expenses to just over $400 per pet (I do all grooming at home). I would personally be able to deduct about $1,300 from my taxes. To figure out how much you can personally save, you’ll have to do the math for your tax bracket.
What Does the HAPPY Act Cover?
My cats - Bean & BA
All food, vet, and upkeep expenses.
What Does it Not Cover?
The cost to adopt or purchase a pet.
Pros of the HAPPY Act
- Added tax incentive could inspire those who have been on the fence about getting a first or additional pets to go out and get one. With the glut of animals at shelters these days any little bit of help to avoid euthanization is a plus.
- For the 60% of American households already with a pet, it is added incentive for those now realizing that being a good pet owner does result in work to try to see it through hard times versus giving the pet up to a shelter.
- Pets have been proven to contribute greatly to our happiness. Happiness leads to increased productivity. So in theory, more pet owners could potentially lead to an improved economy.
Cons of the Happy Act
- It would be an itemized deduction, meaning that, for the most part, it would apply to higher income taxpayers. Without doubt, lower and middle income taxpayers need the most help in maintaining their pets. So this bill is targeted towards the wrong crowd.
- If more people purchase an animal from breeders and animal retailers, then realize they aren’t fit to be a pet owner, it could actually result in more animals ending up in shelters.
My HAPPY Act Amendment
Having been a volunteer dog walker at a local humane society, I know the disproportionate number of animals taken in versus those actually adopted out. Part of me holds a healthy dose of resentment towards puppy mill style retailers and even legit breeders. Every time someone purchases from one of these outlets, that is one less animal that will be adopted from a shelter. And believe me, there’s enough shelter animals to go around.
For this bill to be best case scenario, I would add the amendment that the animal must be or have been adopted from a shelter. These are the animals that need the most help and there should be more incentive to adopt them than their bred counterparts. It would also have the effect of slowing down breeding operations, which would reduce the overall number of animals, and the resulting number of animals that get euthanized.
Besides the owner who buys Muffy, the purebred championship bloodline poodle, does not need any additional tax breaks.
Happy Act Discussion:
- Are you in favor of the passage of the HAPPY Act?
- What amendments, if any, would you add to the bill?
- Would the passage of this bill encourage you to adopt a first or additional pets?
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Our tax system is already so distorted and broken. I cannot imagine adding another perverse incentive to the tax code, especially one as ridiculous as this one. The tax code is complex enough. WE need to simplify it, not further clog up IRS with additional junk like this.
Beyond the complete lunacy of modifying tax code to allow for something like this, my fear would be people adopting animals and treating them like crap but continuing to take a tax credit. Would there be a limit? Could someone start a “puppy farm” that isn’t interested in selling them… just using them to get a tax credit (1 / animal * a lot of “documented” costs)? Shouldn’t a pet lover adopt a pet because of the love of the animal, not the tax credit?
I heard on NPR that there are so few animals to adopt in parts of the USA that we’re importing animals from other countries (e.g., Mexico) because the spay and neuter programs have been so successful. I’m no longer in favor of adopting from shelters because I think the carbon footprint of my dog that I bought from a breeder 1.5 hrs away is smaller. I also like that there are no surprises – we met our dog’s parents (extremely nice) and got him at 8 weeks so we know he wasn’t abused. His temperament is excellent. Can’t say that about all of the shelter dogs.
Everybody loves tax deductions. However, in the slim chance that this gets passed into law, I will have to disagree with your proposed amendment. I have no problem with the government cutting taxes, however, I am against and changes that will result in more administrative costs. Therefore, your ammendment to only allow deductions for adopted pets would not only be unrealistic but would cause greater effort on the part of the IRS to enforce. You also have to look at what the goal of the proposed tax change is. Does the author of the the bill want to stimulate spending, save animals, cut taxes, or a combination? If they want to save animals, then you are correct with your amendment but if the government is trying to stimulate spending on pets or trying to cut taxes for pet owners then your amendment is ineffective in achieving that goal.
I used to live in McCotter’s congressional district. It’s a shame I no longer do, because this is definitely one of the dumber ways to change the tax code, and my complaints would matter more if I lived there. Let’s see, this increases tax code complexity, gives a handout (further, for what’s arguably a luxury good), encourages people to own pets they might not ordinarily have been able to afford, distorts the market for pets…I really can’t see how this makes any sense at all. Maybe I can convince the family I left behind there to complain about this; this is just absurd. (I’m pretty sure I voted for him in an election or two as well! It’s not like I had difficulty picking him over the alternative, either, so this is rather surprising.)
I don’t get it: If this act becomes law, your pet’s health expenses are deductible and yours are not..? I would rather see health insurance and health-related expenses fully tax-deductible – get rid of the 7% AGI floor and the stupid FSA flummery.
If you can’t afford a pet, don’t get one.
This would benefit me personally and I’m totally against it.
1) While we like to think people are good in general, there are always those who will take advantage of any system. I see this leading to more animal abuse.
2) As another poster pointed out, it distorts the market for pets and makes owning a pet affordable for people who normally couldn’t. This may or may not lead to more animal abuse/neglect.
3) ENOUGH WITH TAX INCENTIVES! You want to stimulate the economy? Send me a check. This is as stupid as the commercials that say, “the more you spend, the more you save!”. NO! The more you spend, the more you spend!
4) If you can’t afford a pet now without the incentive, you shouldn’t get one. A $3,500 deduction is not a huge amount over a year (73$/month for the 25% tax bracket) so if that flexibility isn’t already budgeted in, losing your job or other circumstances would lead to more animals in shelters and ultimately destroyed.
I should just learn to expect these half-baked ideas from our politicians. Ugh
Seems great for pet owners everywhere, not sure if my fish would really save me much.
This would benefit me and my boyfriend (we have a dog and two cats) but we are also totally against it. Aside from the concerns about abuse and additional paperwork mentioned – our economy is still in the toilet and likely to remain there, and we are handing out deductions? Helllloo, we need to be raising taxes by getting rid of deductions for things like children, not handing them out for things like pets!
Looks like its time to start a dog breeding company
I think this is a fantastic idea for those who adopt pets from animal shelters, but for those who keep pets as a business, I don’t think it makes much sense.
Good act. Only I will swindlers who take the animals to get a tax credit.
I liked your dog
I love the idea of the HAPPY Act, but I think there ought to be a deduction per pet. Some of us help more of our furry friends than others. However, your suggestion of an amendment that would make this deduction available only to people who adopt from pet shelters is a really bad one. I agree with you that people should get their pets from a shelter and save lives rather than purchasing them, but your idea leaves out those of us who are saving even more lives by rescuing and domesticating feral animals, then finding homes for them when possible. People adopting pets this way would also be left out under your amendment. Anyone who does this good work ends up with more pets themselves than they’d really want to have—some animals don’t get adopted. Taking care of them is a huge financial burden, so if there were a deduction per animal, the HAPPY Act would really help the people who do this work. The feral animal problem is rampant, particularly is semi-rural areas, because of the irresponsible people who abandon their pets.
KathyinMD – I’m not sure which parts of the country that would be in, but if you’re in MD, I can assure you that there are several shelters that have lovely dogs up for adoption no matter which part of the state you’re in. These dogs really need homes.
I come from a family where we used to buy dogs from breeders and never will again because there are too many homeless animals that need homes. In addition, shelter dogs are temperament tested – which isn’t done by breeders. Some shelters in fact are so sticky about testing that a dog that shows signs of fear might be deemed not suitable and killed – which is another topic altogether.
I can also attest to the fact that we got two puppies who were brothers and had all the ‘right’ papers (their parents were champion showdogs) – and the two of them could not have been different in terms of character. Animals aren’t that different from people in that respect.
KatyinMD – would you happen to remember where these parts of the US are? I volunteer with (and have worked for) TNR groups – and those are statistics that would be very persuasive in showing that TNR works but I’ve never come across them in any of the literature anywhere. If you could remember, that would be great.
Also with an estimated 7 million animals entering US shelters every year, and with the number of online sites where you can view animals for adoption you often don’t have to go very far at all to adopt an animal.
I agree 100% with your amendment. The truth of the matter is that shelters are overflowing with great animals that will otherwise be put to sleep while those who do not need the tax breaks aid in that euthanization by going out and spending big money on designer breeds that may be bred unethically.
I think that the act should be amended to include pet owners who have gotten their pets, from in front of Wal-Mart stores, pet shelters, newspaper ads, had pet given to them, or in other words, all pet owners who have not paid for their pet ownership. People who have paid a high store price or breeder price obviously, in my opinion, can afford the costs of their animals’ upkeep.
But not as you said, “just from pet shelters.”
I get the idea, and fully understand the shelter thing, as my wife and I have supported our local shelter(s) for 10 years now. Finding homes for them, placing ads with photos for them, bottle feeding for them, temporary babysitting for them and so on.
Pet owners like my wife and I, who have no children, and consider their pets their children, should have been to claim their pets as “ones in family who depend on our income” for tax deductions all along.
Hey,I’ve got an idea. We don’t need the HAPPY ACT as long as we start taxing people for having more than 2 kids. With all the fear of global warming, pollution, depetion of natural resources, people should not be having anymore kids that what will replace themselves. Fewer kids mean fewer adults who produce “throw away” pets, and it’s a tax releif for those of us who have no kids, but spend way too much in taxes supporting everyone else’s.
Not a good idea.
Taxing kids = Less kids = less future taxpayers = less support for Socialist Insecurity and other ill-considered government programs.
Enjoy your retirement
I think one ammendment should be to the disabled and elderly who need pets to survive but really can’t afford pets. I myself am disabled. My oldest cat; now 10 1/2 years old I resuced along with his mother and siblings before I became fully disabled. My 2nd cat I rescuced after my 1st cat brought him home over 5 years ago in very bad shape {severly abused with broken bones and internal injuries that still affect him today}. Anyway we need this tax break to help us afford to keep our pets, they are the only family I have left like most people like me. Just make it so “Puppy Mills” and the like can not abuse this.
KathyinMD quit listening to NPR, they are full of it, they broadcast nothing but hot air all day long. I have never heard such a lie. I don’t know where you live, but in California the animal shelters are bursting at the seams with abandoned and abused dogs and cats.
Good in theory, but like others have said, probably not the best direction in which we should be headed.
And with something like 3 million pets euthanized EVERY YEAR in the United States, don’t tell me there is any spot in this country where there aren’t enough animals to be adopted. If you’re going to import them from Mexico, “import” them from a neighboring shelter. Going to a breeder 1.5 hours away doesn’t help solve the problem!
It’s amazing how diverse people’s thoughts are, unfortunatly adding a new tax to an already confusing tax system will not help the cause.
Let’s all keep our pets happy and healthy just because we love them and not for tax purposes.
I have just a few things to say to the uneducated people who posted.
1) if you look at the tax code, we CAN deduct our medical/dental expenses.
2) if a person is going to get a pet just to get a tax break, then what stops a person from having a child just to either collect welfare or a tax break.
3) this will not clutter up the IRS as someone stated, it is a break for those who care about pets. I will keep my dogs no matter what is changed or isn’t changed.
4) for those who commented and do not have pets, you really have no knowledge to base your opinion on. You do not know what it is like to have a pet. In most cases pets are like a member of the family, maybe we should just get rid of all tax credits.
Once in a while a really tasty post comes along. Let me slice this one into little pieces and daintily digest it…
“I have just a few things to say to the uneducated people who posted.”
Ah. Ad-hominem attacks. Impressive.
“if you look at the tax code, we CAN deduct our medical/dental expenses.”
Your “education” is showing. http://www.irs.gov/taxtopics/tc502.html says: “You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income”. For most individuals and families that translates to thousands of dollars of non-deductible medical expenses before you can deduct the first penny. If you know better, please tell us.
“if a person is going to get a pet just to get a tax break, then what stops a person from having a child just to either collect welfare or a tax break.”
Who says they don’t? And why is this relevant? At least kids theoretically grow up into taxpayers, so subsidizing babies _might_ be a good idea, at least in theory.
“this will not clutter up the IRS as someone stated, it is a break for those who care about pets. I will keep my dogs no matter what is changed or isn’t changed.”
Think about it this way; I have twelve pets. Prove me wrong. Think about how you would enforce and police such a law. You would have to prove that you have the requisite number of pets on a regular basis, that they are alive and well and live exclusively with you – which means the equivalent of an SSN for every pet. That looks like major-league “clutter” to me…
“for those who commented and do not have pets, you really have no knowledge to base your opinion on. You do not know what it is like to have a pet. In most cases pets are like a member of the family”
So no-one without a pet is allowed to express an opinion? Great! That means that poor people – who pay no taxes – should have no right to express an opinion on taxation policy – what fun! Both ideas are, of course, twaddle. I grew up with pets – including a dog who lived for over twenty years – but my wife is allergic to everything but horses and we couldn’t fit one into the house
. But according to your learned reasoning I don’t know nuthin’ and don’t have the right or the ability to make a reasoned discourse. Oh-Kay…
“maybe we should just get rid of all tax credits.”
Great idea! Here’s a better one – let’s just get rid of the income tax entirely and go to a sales tax (www.fairtax.org, for instance). No Tax returns, no Payroll nightmares, No Government digging through your financial records, and April 14th is just another day…
Yum *BURRRRRP*
@Wizard Prang, you are right about people lying to get the deduction. The entire reason that SSN’s are required for the children in order to claim them as dependents on your return is that prior to this requirement (which started to be instituted in phases in 1986) was that, among various other strategies, PEOPLE WERE CLAIMING THEIR PETS AS CHILDREN on their returns. The first year that SSN’s were required for children to be claimed as dependents there were something like 7 MILLION FEWER CHILDREN in the US because people couldn’t make false claims anymore.
So unless we are going to institute the equivalent of SSN’s for animals (which, given the number of untracked stray and feral animals that could conceivably be “adopted” without going through a breeder or rescue organization, is impossible) – if we instituted this people would lie. And when people claim false deductions on their tax returns, THEY ARE STEALING MONEY FROM YOU.
Bad idea, I say…
I’m sorry…………..I am 100% for it. We have two pomeranians which are 14 and 15 years old. One of them has always been quite healthy but the other has always had health problems on account of her small size. We have spent close to $15,000.00 on just one of them. We love them as we do our own children. They need frequent care as they age. What are we to do? just let them die? No, I think not. They give us love in return on a daily basis. Medical expenses are medical expenses! For pets or children. We SHOULD be allowed to deduct them.
You will need receipts for all tax deductions on this. Getting receipts from the vet’s office will cut down on cheating. I’m not sure why I’m responding again because I don’t think this new tax code will pass. I want it to.
GREAT!!! I love this!!!, I had 4 different cancers, Colon, Rectal, Ovarian, Uterus cancers, my job was allowed to fire me because of the cancers, the day of my surgeries, I was told to go home because my health care was canceled. I could not get medi-cal because I was not a illegal alien and even with a doctors plead that I was Stage 3 cancer and needed medical help ASAP, I was still denied Medi-Cal State Health Care, so,,, I can only deduct a couple thousand but owe over 120K to the hospital, I can’t get a house because my credit score is in the low 400’s because of the medical bills I owe are reported and screwing up my credit score that was 780.
I can’t have children now, my fiance left me and all I have left are my pet’s. A Pinto-Arabian Horse, 7 Siberian Husky-Wolf mixes and two Macaws. so If can have deserved deductions for my pets at lest, then FUCK everyone else who hates the idea, your probably getting every type of deductions I can’t get, so I don’t mind getting at lest one more than the only one I get now!!!!!
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