The Internal Revenue Service has issued Announcement 2021-7, confirming that amounts paid for certain personal protective equipment (PPE) — including masks, sanitizing wipes and hand sanitizer — used for the primary purpose of preventing the spread of coronavirus (COVID-19) are deductible medical expenses.
Therefore, amounts paid for COVID-19 PPE that are not compensated for by insurance or otherwise are deductible, provided that the taxpayer’s total medical expenses exceed 7.5% of adjusted gross income.
Amounts paid for COVID-19 PPE are also eligible to be paid or reimbursed under:
- Health flexible spending arrangements (FSAs);
- Archer medical savings accounts (Archer MSAs);
- Health reimbursement arrangements (HRAs); or
- Health savings accounts (HSAs).
However, if an amount is paid or reimbursed under any of the above accounts, or any other health plan, it will not be considered a deductible medical expense.
Group health plans (including health FSAs and HRAs) may be amended pursuant to the announcement to provide for reimbursements of expenses for COVID-19 PPE incurred for any period beginning on or after Jan. 1, 2020, if certain requirements are satisfied.
plan amendment requirements
Group health plans can be amended to provide for reimbursements of COVID-19 PPE expenses pursuant to the announcement if:
- The amendment is adopted by the last day of the first calendar year following the plan year in which it is effective;
- The plan is operated consistently with the amendment terms until the amendment is adopted; and
- No amendment with retroactive effect is adopted after Dec. 31, 2022.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.