IRS Announces PPE is Tax Deductible

The IRS released two statements on PPP and other equipment to prevent the spread of COVID-19:

 

Face masks and other personal protective equipment to prevent the spread of COVID-19 are tax deductible

WASHINGTON — The Internal Revenue Service issued Announcement 2021-7 today clarifying that the purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses.

The amounts paid for personal protective equipment are also 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).

For more information on determining what is deductible, see Can I Deduct My Medical and Dental Expenses? and Publication 502, Medical and Dental Expenses.

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Inside This Issue

Announcement 2021-7 notifies taxpayers that amounts paid for personal protective equipment for the primary purpose of preventing the spread of the Coronavirus Disease 2019 are amounts paid for medical care under § 213(d) of the Internal Revenue Code.  As a result, the announcement confirms that these amounts are qualified medical expenses eligible to be paid or reimbursed without being included in gross income under health flexible spending arrangements (health FSAs), Archer medical savings accounts (Archer MSAs), health reimbursement arrangements (HRAs), or health savings accounts (HSAs).  In addition, the announcement notifies administrators of group health plans regarding the ability to make certain plan amendments pursuant to the announcement.

Announcement 2021-7 will appear in IRB 2021-15, dated April 12, 2021.