Starting a family through surrogacy involves careful financial planning, and understanding which costs may qualify for tax deductions can make a meaningful difference.

While most surrogacy agency fees are not deductible under current IRS rules, there are key exceptions—particularly related to the intended parent’s medical care—and strategies that can reduce your overall financial burden.

Learn More About IVF and Surrogacy Tax Write-Offs

This guide breaks down which surrogacy-related costs might qualify for tax deductions, what the IRS rules say, and how working with a professional and a good agency can make the financial side of your journey easier to manage.

Are Surrogacy Agency Fees Tax Deductible?

Right now, the IRS doesn’t allow you to deduct most surrogacy agency fees. This includes fees for coordinating the process, screening surrogates, legal services, and other agency-related costs. These aren’t considered medical expenses under the IRS’s definition.

However, some parts of the process—especially those related to your own fertility treatments—could be tax deductible. A tax advisor who understands fertility-related expenses can help you figure out what qualifies and how to organize your records effectively.

What Counts as a Qualified Medical Expense?

The IRS allows you to deduct medical expenses if they are primarily for diagnosing, treating, or preventing a health condition. That means procedures like IVF, egg retrieval, and fertility medications could be deductible if they are part of your personal care.

Expenses related to the surrogate, like her medical bills, compensation, or delivery costs, usually don’t qualify because they aren’t considered your medical care.

• Can Be Deducted: Fertility treatments you receive yourself (IVF, medications, lab work), and some travel or storage fees directly tied to your treatment.
• Can’t Be Deducted: Surrogate’s medical bills, her pay, legal and agency coordination fees.

If you’re planning to claim any deductions, make sure you save all receipts and talk to a tax professional for guidance.

What Surrogacy Expenses Might Be Tax Deductible?

Even if agency fees aren’t deductible, several fertility-related medical expenses may qualify under IRS guidelines:

• IVF, egg retrieval, and hormone treatments performed on the intended parent are generally deductible as they treat infertility, a recognized medical condition.
• Appointments, ultrasounds, lab work, and blood tests that support a prescribed fertility plan may also be eligible.
• Storage fees for embryos or eggs are deductible only when linked to an active or medically necessary treatment cycle—not for long-term or elective storage.
• Travel expenses like mileage, transportation, hotel stays, and parking may be deductible if they are essential to accessing fertility care and are well documented.

Learn How to Afford Surrogacy

What Does the IRS Say About Medical Expenses?

To qualify for a deduction, a medical expense has to help diagnose, treat, or prevent a health condition, and it has to be for you—not for someone else.

What’s Yours vs. the Surrogate’s

You can deduct expenses like IVF, fertility tests, or medications when they’re part of your own care. But you can’t deduct the surrogate’s prenatal care, delivery, insurance, or compensation—even if you paid for them.

These rules apply even if your contract says you’re responsible for those costs, which is especially important to understand if you’re considering independent surrogacy. Until tax laws change, the IRS doesn’t count them as deductions.

Legal Agreements Aren’t Always Enough

Just because your surrogacy contract requires you to pay something doesn’t mean the IRS will let you deduct it. The IRS uses its own rules to decide what’s eligible, so you’ll want to work with a tax expert who understands these issues.

A good advisor can help you figure out what qualifies, how to time your payments, and what records to keep.

Keep Good Records

Good documentation is key. You should save:

• Detailed invoices from your fertility clinic
• Copies of prescriptions
• Receipts and payment confirmations
• A calendar or list of treatments
• Contracts that explain what the charges are for

Having organized records can help you claim deductions and avoid problems if the IRS ever asks for proof.

How a Surrogacy Agency Can Help with Financial Planning

A trusted surrogacy agency does more than connect you with a surrogate—they can also help you plan for the costs and understand your financial options.

Clear Cost Breakdowns

Top agencies will give you a full breakdown of all expenses, explaining which ones are medical (and possibly deductible) and which are administrative.

This helps you budget, use your HSA or FSA wisely, and stay organized for tax time—an especially important factor when comparing surrogacy agencies., explaining which ones are medical (and possibly deductible) and which are administrative. This helps you budget, use your HSA or FSA wisely, and stay organized for tax time.

They can also help you collect the documentation you’ll need if you plan to claim deductions or get reimbursed through a health account.

Help from Financial Experts

Some agencies work with fertility finance professionals who know how to make the most of tax-advantaged strategies. These experts can help you:

• Maximize your HSA or FSA by applying pre-tax funds toward qualified fertility treatments, such as IVF and prescribed medications, which can significantly lower your overall healthcare expenses.
• Schedule fertility-related payments within the same calendar year to align with your tax filing period, which can help ensure eligible expenses are grouped for maximum deduction impact.
• Research nonprofit organizations and fertility lenders that offer grants or favorable loan terms tailored to help families cover the high cost of surrogacy and related medical treatments.
• Anticipate upcoming surrogacy-related payments and align them with your treatment timeline and financial plan to reduce the risk of unexpected expenses and maintain budget control

With expert financial guidance, you can approach your surrogacy plan with greater clarity, make informed decisions about your spending, and minimize unexpected costs as you move forward.

Refund and Risk Plans

Many agencies offer refund or protection programs in case things don’t go as planned. If your journey is interrupted due to a failed embryo transfer or other complications, these programs may offer some financial protection.

Having a financial safety net in place can reduce uncertainty and provide stability, allowing you to focus on your family-building journey with more confidence and less stress.

Explore Grants and Assistance

Smart Ways to Pay for Surrogacy

Covering the cost of surrogacy can be challenging, but several financial strategies—ranging from tax-advantaged accounts to nonprofit support—can make it more affordable. Below are practical options that may reduce your expenses and improve financial flexibility.

1. Use Your HSA or FSA

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) allow you to use pre-tax income to cover eligible fertility treatments such as IVF, egg retrieval, and medications prescribed for your own medical care—helping reduce overall treatment costs while maximizing tax efficiency.

You usually can’t use these funds for surrogate-related costs. Check your plan’s rules and be sure to use the money before your deadline if you have an FSA.

2. Apply for Grants or Loans

Nonprofit organizations such as Baby Quest Foundation, The Cade Foundation, and RESOLVE provide financial assistance in the form of grants to individuals pursuing fertility treatment. These grants are typically awarded based on financial need and can offset significant costs.

Additionally, fertility-specific loans may offer lower interest rates or more flexible repayment terms compared to traditional personal loans, making them a viable option for managing surrogacy-related expenses.

3. Ask About Payment Plans

Many agencies provide structured payment plans, helping intended parents manage surrogacy costs over time without the burden of large upfront payments.

In addition, bundled packages that combine core services—like matching, surrogate screening, and legal support—can reduce total costs and streamline logistics.

These options improve financial predictability and allow families to budget more confidently while understanding the true cost of agency services.

4. Explore Federal Programs

While there’s no direct federal funding for surrogacy, some related programs can still help:

• TRICARE: Offers limited fertility benefits for military families.
• FEHB: Some federal employee health plans cover parts of fertility care.
• Adoption Tax Credit: Doesn’t apply to surrogacy yet, but there are efforts to expand it to include reproductive technology.

Stay informed about changing laws and talk to a tax professional to make sure you’re getting all the help you’re eligible for.

Need Help Understanding the Costs?

Navigating tax rules around surrogacy can feel overwhelming, but expert guidance makes it manageable. A knowledgeable team can clarify which fertility-related expenses meet IRS criteria and show you how to maximize the value of your HSA or FSA for eligible treatments.

We provide personalized guidance to help you understand your surrogacy-related financial options, from identifying deductible expenses to planning payments in alignment with tax-advantaged strategies.

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