This means that anything you as an individual taxpayer spent for COVID-19 PPE for your own personal use, or that of your spouse or dependents are deductible as medical expenses (Code Sec. 213) as long as your total medical expenses exceeds 7.5 percent of adjusted gross income and you weren’t otherwise reimbursed for the PPE purchases.
And further good news, since amounts paid for PPE are medical care expenses, they 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).
Note, however, that if you are reimbursed by one of the methods listed above, you can no longer claim then as a medical deduction on your taxes.
Group Health Plans
If COVID PPE expenses are not reimbursed under the terms of your group health plan (including a health FSA and an HRA), the plan can be amended under this IRS guidance to do so for any PPE expenses incurred on or after January 1, 2020.
Group health plans can be amended under this IRS guidance if:
- the amendment is adopted no 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.
This can be confusing, so you may want to consult with your Human Resource team for details, or we are happy to answer questions as we can.