H.R. 7770: Hearing Aid Assistance Tax Credit Act

This bill, known as the Hearing Aid Assistance Tax Credit Act, aims to amend the Internal Revenue Code to provide individuals with a tax credit for the purchase of hearing aids. The main features of the bill are as follows:

Credit for Hearing Aids

This section outlines the tax credit that individuals can claim when they buy hearing aids. Key points include:

• Amount of Credit: An individual can receive a tax credit equal to the amount they paid for a qualified hearing aid, up to a maximum of $1,000. This amount must not be covered by insurance or any other compensation.
• Income Limitations: The credit is not available to individuals whose modified adjusted gross income exceeds certain thresholds:
  • $300,000 for heads of household or joint returns,
  • $150,000 for all other individuals.
• Definition of Modified Adjusted Gross Income: This term includes adjusted gross income plus amounts excluded from gross income under specific sections of the tax code.

Qualified Hearing Aid

The bill defines a "qualified hearing aid" as a hearing device that:

• Is described in specific sections of the Code of Federal Regulations and
• Is authorized for commercial distribution under the Federal Food, Drug, and Cosmetic Act.
• Is intended for use by either the taxpayer or a dependent for whom the taxpayer is allowed a deduction.

Election for the Credit

The tax credit applies only if the individual elects to have this section apply for the taxable year. This election can only be made once every five years, meaning an individual cannot claim the credit in consecutive years.

Restrictions on Double Benefits

The bill specifies that taxpayers cannot claim the hearing aid credit for expenses if they have already claimed a deduction or a different credit for the same expense under any other provision of the tax code.

Effective Date

The changes outlined in this bill will go into effect for taxable years starting after December 31, 2026.

Relevant Companies

• SONY - This company produces hearing aids and other electronic devices and may see changes in sales due to the proposed tax credit.
• WSO - This company is involved in hearing technology and may benefit from increased sales as consumers find it more affordable to purchase hearing aids with the tax credit.