Are Egg Donor Expenses Tax-Deductible?

Egg donation. It sounds noble, selfless, even sacred. And it often is. It’s an extraordinary decision to help someone else build a family. But as with most things that involve a check in the mail, there’s another layer you can’t ignore: taxes.

Yes, the financial side of egg donation is real, and when it's tax season, many donors find themselves scratching their heads. So, what money is taxable? Can you deduct your Uber rides to the clinic? What about that acupuncturist you saw before retrieval? Let’s look at what you need to know when it comes to egg donation and taxes. 

How Egg Donor Compensation Is Classified

Whether you chose to donate your eggs purely out of the goodness of your heart or because the financial compensation helped you reach a personal goal, the IRS doesn't really care why you did it. All it sees is money exchanged for services rendered, and that means it’s taxable income.

Some people try to draw parallels between egg donation and things like insurance reimbursements or emotional damages. Unfortunately, those comparisons don’t hold up. Egg donation payments don’t fall into any non-taxable loopholes. No matter how you slice it, you got paid for providing a valuable biological service.

The payment is often treated as freelance income. You didn’t get a W-2 because you weren’t technically an employee. What you’ll likely receive, if your compensation exceeds $600, is a Form 1099-MISC. That form reports what you were paid. If you don’t get it, that doesn’t let you off the hook. Legally, you still have to report it.

A lot of agencies do a great job of being upfront about this, but others don’t. Some may even claim the compensation is not reportable, which is risky advice. 

IRS Guidelines on Egg Donation Income

The IRS states that any income that has not has been explicitly exempted by law is taxable. The landmark case to know is Perez v. Commissioner. In this legal case, the courts reviewed whether egg donation income was taxable. The donor, who received compensation through a known fertility agency, tried to argue that the money was intended to cover the physical and emotional pain of the procedure, not to be treated like regular income.

The IRS and the court disagreed with the donor and ruled that the payment was clearly for services, not gifts, and should be taxed accordingly. This case sealed the deal. Since then, compensation for egg donation has been solidly seen as taxable income.

So if you're thinking about sidestepping the system because the income felt more like a gesture of gratitude than a paycheck, it’s best to think again. Even if your donation came from a deeply personal or emotional place, the IRS still sees it as a business transaction.

Can Medical Expenses Be Deducted?

Now here’s where things get a little murkier, and maybe a little disappointing. In general, medical expenses can be deducted if they were paid out-of-pocket and exceed 7.5% of your adjusted gross income. The catch is that most egg donors don’t actually pay for the bulk of their medical expenses. Those are usually covered by the intended parents or the agency.

That means the medication, the egg retrieval procedure, the monitoring appointments, and the hormone shots are not your financial responsibility, and therefore not deductible.

Let’s say you did pay for something out of pocket. Maybe a post-retrieval acupuncture session, a therapy visit, or some anti-nausea medication that wasn’t reimbursed. Could that count? Possibly. But it would only be deductible if:

• You itemize your deductions (which most people don’t).
• Your unreimbursed medical costs exceed the 7.5% threshold.
• You have receipts and documentation to back it up.

That said, if your donation journey involved significant out-of-pocket medical or mental health care expenses, it’s worth discussing with a tax professional just in case.

Tax Filing Tips for Egg Donors

So, you’ve donated and received your compensation. Now the year is winding down, and it’s time to report your income. What should you do to make sure everything’s buttoned up and you don’t get a scary letter from the IRS in a few months?

Here are some practical, sanity-saving tips:

Keep records 

Save every email, invoice, travel receipt, calendar note, and mileage log. If you paid for anything out-of-pocket, document it. Even if you end up not needing those receipts, having them handy is always a smarter move than scrambling last-minute.

Request your 1099 early

Agencies aren’t always on top of sending out tax forms. Some will only provide one if you specifically ask. Reach out to your coordinator in January and confirm when you’ll receive your Form 1099-MISC. The earlier you have it, the smoother your filing process will be.

Pay quarterly taxes if needed

If you’re donating eggs while also freelancing, driving for Uber, tutoring, or doing anything else with untaxed income, you might need to make estimated quarterly tax payments. This helps you avoid the underpayment penalty the IRS hands out. Not sure if this applies to you? A quick consultation with a tax professional can give you clarity.

Explore gray-area deductions cautiously

Did you have to take unpaid time off work for monitoring appointments? Travel several hours out of town? Stay in a hotel for the procedure? If those costs weren’t reimbursed, there may be room for deduction, but only if you’re technically considered self-employed for tax purposes. 

Be honest

Even if you don’t get a 1099, you’re legally required to report your compensation. The IRS uses several tools to verify income, including cross-checking agency records, bank deposits, and prior year behavior. It’s not worth the risk. File honestly and early. 

Final Thoughts

Egg donation is beautiful, complex, and undeniably generous, but it’s also a business arrangement. And like any business deal, taxes must be paid. The key to staying ahead is simple: be informed, keep records, and treat the compensation as what it is, income. 

While the donation itself might be over in a few weeks, the financial implications can last well into the following year. Don’t let tax season blindside you. Get the facts, get organized, and, if necessary, get help from a professional.

FAQs

Can egg donors deduct medical expenses?

Generally, no. Most medical costs tied to egg donation are paid by the intended parents, not the donor. If you happened to pay for something out of pocket and itemize deductions, you might be able to claim a portion.

Do I have to report egg donor compensation on taxes?

Yes, you have to report egg donor compensation on taxes. It’s considered taxable income. Even if your agency doesn’t issue a 1099, you are responsible for reporting any compensation received.

Is there any scenario where egg donation income isn’t taxed?

Not under current IRS rules. All compensation for egg donation is taxable unless future legislation changes the game.

Can I deduct travel costs or time off work?

Only if those expenses were unreimbursed and you're categorized as self-employed. Even then, it’s a gray area. Talk to a tax advisor before trying to claim anything.

Will I owe a lot in taxes on egg donor income?

It depends on your total income and tax bracket. If the donation was your only income and it falls below the standard deduction threshold ($13,850 for single filers in 2023), your liability may be low or zero. But if this was supplemental income, expect to pay a portion of it in taxes.