A therapy animal can be a meaningful part of your practice, helping clients feel calmer and more at ease during sessions. Therapy animals are most often dogs, though other animals are used too. Whether the costs of caring for one are tax-deductible depends on how your animal is classified and how it's used in your work.
This article walks through which therapy animal costs are generally deductible for a private practice and how to categorize them in Heard. It also explains how your animal's classification affects what you can deduct.
Why the classification matters
"Therapy animal," "emotional support animal," and "service animal" are often used interchangeably, but they refer to three distinct classifications. That classification determines whether related costs can be deducted, so it helps to know where your animal falls.
- Therapy animal: Trained and certified to provide comfort to people in a clinical setting like a hospital or mental health practice, and most often a dog. Outside of work, they typically live as their owner's companion.
- Emotional support animal (ESA): Provides comfort to one person, their owner, with no formal training, and can be any type of animal. ESAs are recognized at the state level, usually through a letter from a doctor or mental health practitioner.
- Service animal: Individually trained to do specific work or tasks for one person with a disability, including psychiatric service animals. Under the ADA, a service animal is specifically a dog, with a narrow provision for miniature horses.
Which therapy animal costs are generally deductible
For a private practice, the costs most likely to qualify are those tied directly to making your animal available to clients as an ordinary and necessary part of running your business. These can include:
- Transportation to and from work locations outside your office
- Leashes, collars, carriers, and crates used on the job
- Beds and food dishes kept in your office or at work locations
Some other costs may qualify as well, though they sit in more of a gray area:
- Therapy animal training, supervision, and certification
- Veterinary bills for vaccinations required to enter a training program
The deductions above are business deductions, claimed by your practice because the animal is part of how you do your work. They're separate from the medical expense deduction for a service animal, which is a personal deduction that applies only when you yourself rely on a trained service animal for your own disability. That medical route doesn't apply to a therapy animal you use with clients, and an emotional support animal doesn't qualify for it either.
Which costs usually aren't deductible
When a therapy animal is also a personal companion or family pet, the costs of everyday care are treated as personal rather than business expenses, even when they overlap with keeping your animal healthy enough to work. These typically include:
- Routine vet visits, treatments, and medication
- Pet insurance
- Food
- Toys
- Grooming
- Care products like brushes and nail trimmers
A helpful rule of thumb: unless a cost is specifically tied to making your therapy animal available to clients, it's safest to treat it as non-deductible.
How to categorize a therapy animal expense in Heard
Because Heard handles your bookkeeping, your transactions sync automatically from your connected business bank accounts, and your bookkeeping team reviews and categorizes them each month. You can also categorize transactions yourself, and your team is there to confirm the right fit.
To categorize a transaction:
- From your Heard dashboard, open your transactions.
- Find the therapy animal expense you want to categorize.
- Assign the category that matches the expense, or confirm the category already applied.
There isn't a single "therapy animal" or "pet" category because these costs fall under different business categories depending on the expense.
If you're not sure where a therapy animal cost belongs, your bookkeeping team can help. Add a note to the transaction that briefly describes how it relates to your practice, so your bookkeeping team can categorize it.
What if my therapy animal is also my pet?
Many therapy animals have both a business role and a personal role. For example, a dog may attend client sessions during the week but otherwise live as a family pet. In those situations, it may not be appropriate to treat every expense as entirely business-related or entirely personal.
When an expense benefits both your practice and your personal life, a reasonable allocation may be necessary. The allocation method should be based on the facts and circumstances and supported by documentation. For example, if your therapy dog regularly attends client sessions throughout the week but otherwise serves as a family pet, you should evaluate whether certain mixed-use expenses have both business and personal components. Any allocation should be reasonable, consistently applied, and supported by documentation showing how you determined the business portion of the expense.
There is no IRS-approved formula for allocating therapy animal expenses. The key is maintaining documentation that supports how the animal is used in your practice and how you determined the business purpose of any expense. Factors that may be relevant include the animal's role in client services, the time spent on business activities, and whether the expense was incurred primarily for business purposes.
Some expenses may be entirely business-related, some entirely personal, and others may require a reasonable allocation between business and personal use.
Does my animal need to be certified to deduct any costs?
Certification can help support the business purpose of an animal used in your practice, but certification itself is not required for a business expense deduction. The deductibility of an expense depends on the facts and circumstances and how the animal is used in the business.
I'm an S corp owner. Can I deduct therapy animal costs on my personal return?
Generally no. For an S corp, qualifying costs are deducted by the business, usually by having the practice pay them directly or reimburse you through an accountable plan. Expenses paid personally and not reimbursed typically can't be claimed.