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IRS Says Face Masks, Hand Sanitizers Are Tax Deductible

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What You Need to Know

  • Individuals can deduct items purchased to prevent COVID-19 spread as long as their total medical expenses exceed 7.5% of AGI.
  • Such purchases are also eligible to be paid for or reimbursed under FSAs or HSAs.
  • Group health plans, including health FSAs and HRAs, may also be amended to allow reimbursement.

Face masks, hand sanitizers and sanitizing wipes purchased to prevent the spread of COVID-19 are tax deductible medical expenses, the Internal Revenue Service said Friday.

In Announcement 2021-7, the IRS states that amounts “paid by an individual taxpayer for COVID-19 [Personal Protective Equipment] 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” provided that the taxpayer’s total medical expenses exceed 7.5% of adjusted gross income, as stated under Section 213 of the Internal Revenue Code.

The IRS also said that such purchases are also eligible to be paid for 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 a health FSA, Archer MSA, HRA, HSA or any other health plan, it is not deductible” under Section 213.

Group health plans, including health FSAs and HRAs, may also be amended pursuant to the IRS announcement to provide for COVID-19 related reimbursements incurred for any period beginning on or after Jan. 1, 2020, the IRS said.

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