Costs of Personal Protective Equipment to Prevent the Spread of COVID-19 Are Tax Deductible

The IRS has issued Announcement 2021-7, which clarifies that amounts paid for personal protective equipment, such as masks, hand sanitizer, and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are deductible medical expenses (provided total medical expenses exceed 7.5% of the taxpayer’s AGI). Such amounts also 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).

The announcement notes, “Group health plans may be amended pursuant to this announcement if the amendment is adopted not later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective, no amendment with retroactive effect is adopted after December 31, 2022, and the plan is operated consistent with the terms of the amendment, including during the period beginning on the effective date of the amendment through the date the amendment is adopted.”

A full reading of the announcement can be read here. If you have any questions about this please contact your ALL tax advisor or call us at 617-738-5200.