IRS announces PPE is medical expense

The Internal Revenue Service has issued Announcement 2021-7, clarifying that amounts paid for certain personal protective equipment (PPE)—such as masks, hand sanitizer and sanitizing wipes—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.

Tax-favored accounts

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.

Plan amendments

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.

Disclaimer: The information contained herein is not intended to be construed as legal advice, nor should it be relied on as such. Employers should closely monitor the rules and regulations specific to their jurisdiction(s) and should seek advice from counsel relative to their rights and responsibilities.

By Dakota Hebert
Chief Marketing Officer, Checkwriters
Dakota joined Checkwriters in 2013, where he worked in the Sales and Marketing departments and currently serves as Chief Marketing Officer. He is responsible for the company’s national brand and marketing, corporate communications, and hosts the Checkwriters Podcast. Previously, he worked in communications in the U.S. Senate in Washington, D.C. He lives with his wife and five children in Massachusetts.

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