A recent announcement from the Internal Revenue Service (IRS) clarifies that amounts paid for personal protective equipment (PPE) by taxpayers, such as face masks, hand sanitizer and sanitizing wipes used for the primary purpose of preventing the spread of COVID-19, are to be treated as deductible medical expenses.
Therefore, amounts paid by an individual taxpayer for COVID-19 PPE for use by the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent(s) that are not compensated for by insurance, or otherwise, are deductible under Internal Revenue Code 213(d) — provided that the taxpayer’s total medical expenses exceed 7.5% of adjusted gross income.
Amounts paid for the equipment are eligible to be paid or reimbursed under the following accounts:
- Health flexible spending arrangements (FSAs);
- Archer medical savings accounts (Archer MSAs);
- Health reimbursement arrangements (HRAs); or
- Health savings accounts (HSAs).
Keep in mind, if an amount is paid or reimbursed under any of the above accounts or additional plans, it will not be considered a deductible medical expense.
FSAs, HSAs and HRAs may be amended pursuant to this announcement to provide for reimbursements of expenses for PPE incurred for any period beginning on or after January 1, 2020.
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