Close
Close

COVID-19 protective equipment deemed reimbursable

RFP
Tax Hot Topics newsletter The IRS has announced (Announcement 2021-7) that personal protective equipment (PPE) with the primary purpose of preventing the spread of COVID-19, including masks, hand sanitizer and sanitizing wipes, will be eligible medical expenses under Section 213(d) for tax preferred accounts and the itemized deduction.

Employers may adjust their plans to permit the payment or reimbursement of expenses for COVID-19 PPE through an employer sponsored health flexible spending arrangement (FSA), Archer medical savings account (MSA), health reimbursement arrangement (HRA), or health savings account (HSA). Individuals may also claim an itemized deduction for COVID-19 PPE used for themselves or a spouse or dependent, as long as the costs are not reimbursed by insurance and the taxpayer’s total medical expense exceed the 7.5% adjusted gross income floor.

Group health plans, including health FSAs and HRAs, which by their terms do not permit the reimbursement of expenses for COVID-19 PPE, may be amended pursuant to Announcement 2021-7 to provide for reimbursements of expenses for COVID-19 PPE incurred for any period beginning on or after Jan. 1, 2020. A retroactive amendment generally must be adopted by the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective, but no later than Dec. 31, 2022.

Contact:
Jeff Martin
Partner
Washington National Tax Office
T +1 202 521 1526

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.