CPAP machines, masks, oxygen concentrators and portable concentrators are expensive and often bought partly out of pocket. They are exactly the kind of purchase a health savings account (HSA) or health flexible spending arrangement (FSA) exists for. This guide sets out what the IRS publications actually say. It is general information, not tax advice. Your plan administrator and tax adviser have the final word on your situation.
What the IRS counts as a medical expense
IRS Publication 502 (2025 edition, for 2025 returns) defines medical expenses as:
the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body … They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.
It adds that medical care expenses “must be primarily to alleviate or prevent a physical or mental disability or illness” and excludes things “merely beneficial to general health”.
Oxygen and oxygen equipment: named directly
Pub 502 has a specific entry:
Oxygen. You can include in medical expenses amounts you pay for oxygen and oxygen equipment to relieve breathing problems caused by a medical condition.
That covers a prescribed home or portable oxygen concentrator, oxygen cylinders and refills, and oxygen equipment generally.
CPAP: covered by the general definition
Pub 502 doesn’t list CPAP machines by name, and it says it covers “many common medical expenses but not every possible medical expense”. For anything not listed, it points you back to the general definition. A CPAP prescribed to treat diagnosed obstructive sleep apnea is equipment used to treat a disease. Masks, cushions, tubing and filters are the supplies it needs. A home sleep test is a diagnostic device or service used to diagnose disease.
Many retailers label CPAP products HSA/FSA eligible. cpap.com, for example, labels its home sleep test that way. A retailer’s label isn’t an IRS ruling, though. What matters is that the purchase meets the definition and that you keep the records.
Paying from an HSA
From IRS Publication 969 (2025 edition):
- What’s tax-free. Distributions used for “qualified medical expenses”, defined as medical care under Code section 213(d) for you, your spouse and your dependents, aren’t taxed.
- What’s taxed. Distributions for anything else are included in income and “may be subject to an additional 20% tax”. The extra 20% doesn’t apply after you become disabled, reach age 65, or die.
- Records. You must keep records showing the distributions were exclusively for qualified medical expenses, weren’t already paid or reimbursed from another source, and weren’t taken as an itemized deduction. Don’t send them with your return.
- Timing. You don’t have to take distributions in the year you pay. Balances carry over from year to year.
2026 contribution limits
Pub 969 gives these limits for 2026:
| HDHP coverage | 2026 HSA limit | 2026 minimum deductible | 2026 maximum out-of-pocket |
|---|---|---|---|
| Self-only | $4,400 | $1,700 | $8,500 |
| Family | $8,750 | $3,400 | $17,000 |
The Medicare catch
Pub 969: “Beginning with the first month you are enrolled in Medicare, your contribution limit is zero.” That includes retroactive Medicare coverage, so contributions made during a backdated enrollment period count as excess. You can still spend an existing balance on qualified expenses, including oxygen equipment and CPAP supplies.
Paying from an FSA
For health FSAs, Pub 969 says qualified medical expenses are “those specified in the plan that would generally qualify for the medical and dental expenses deduction”. So the Pub 502 definition is the starting point, but your employer’s plan document decides what it reimburses. Plans can also use a grace period or a carryover, but not both, so check your plan’s deadline before buying a big-ticket item late in the year.
Can you deduct it instead?
If you itemize, Pub 502 lets you deduct only the part of total medical and dental expenses above 7.5% of your adjusted gross income. You can’t deduct anything paid with a tax-free HSA distribution. Pub 502 also says you can’t deduct amounts fully reimbursed by an FSA you funded with pre-tax pay.
What to keep
- The prescription for the CPAP or oxygen equipment.
- The sleep study or oxygen test result, if you have it.
- The itemized receipt, showing what was bought, when and for whom.
- For an FSA, whatever substantiation your administrator asks for.
Typical HSA/FSA purchases, with prices
| Purchase | Example price | HHZ guide |
|---|---|---|
| Home sleep test | $99 at cpap.com | CPAP without insurance |
| Auto CPAP | $873–$1,004 at cpap.com | Best auto CPAP |
| CPAP mask | $105–$167 at ResMed’s shop | CPAP masks |
| 5 LPM home concentrator | from about $738 | Home oxygen concentrators |
| Portable oxygen concentrator | about $2,400–$2,800 | Portable oxygen concentrators |
Prices were checked on 13 October 2026. See each guide for its sources.
Verdict
Oxygen equipment is named directly in IRS Pub 502. A prescribed CPAP, its supplies and the sleep test that diagnosed you fit Pub 502’s general definition of medical expenses. Pay from your HSA or FSA, keep the prescription and itemized receipt, and check your FSA plan’s rules and deadlines. If you’re about to join Medicare, stop HSA contributions in time, but keep the balance for future supplies.