Did you know that Personal Protective Equipment (PPE) such as masks, hand sanitizer, and sanitizing wipes purchased for the prevention of the spread of COVID-19 may be treated as amounts paid for medical care under IRS Code Sec. 213(d)?

In addition, these expenses are eligible to be paid or reimbursed under Health Flexible Spending Arrangements (health FSAs), Archer Medical Savings Accounts (Archer MSAs), Health Reimbursement Arrangements (HRAs), or Health Savings Accounts (HSAs). But if an amount is paid or reimbursed under a health FSA, Archer MSA, HRA, HSA, or any other health plan, it is not also deductible under Sec. 213.

In other words, amounts paid by an individual taxpayer, the taxpayer’s spouse, or the taxpayer’s dependents that are not compensated by insurance are deductible under Sec. 213(a) if the taxpayer’s total medical expenses exceed 7.5% of adjusted gross income.

As of now, Group Health Plans, including Health FSAs and HRAs, that do not reimburse may still be amended up until Dec. 31, 2022, so keep an eye out for specific changes.

For more information about PPE deductions, see IRS Announcement 2021-7 or contact us and we’ll be happy to discuss your options.