The Internal Revenue Service has issued Announcement 2021-7, clarifying that amounts paid for certain personal protective equipment (PPE)—such as masks, hand sanitizer and sanitizing wipes—used for the primary purpose of preventing the spread of coronavirus (COVID-19) are deductible medical expenses.

Therefore, amounts paid for COVID-19 PPE 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.


Tax-favored Accounts

  • Amounts paid for COVID-19 PPE are also eligible to be paid or reimbursed under:
  • Health flexible spending arrangements (FSAs)
  • Archer medical savings accounts (Archer MSAs)
  • Health reimbursement arrangements (HRAs)
  • Health savings accounts (HSAs)

However, if an amount is paid or reimbursed under any of the above accounts, or any other health plan, it will not be considered a deductible medical expense.


Plan Amendments

Group health plans (including health FSAs and HRAs) may be amended pursuant to the announcement to provide for reimbursements of expenses for COVID-19 PPE incurred for any period beginning on or after Jan. 1, 2020, if certain requirements are satisfied.


Plan Amendment Requirements

  • The amendment is adopted by the last day of the first calendar year following the plan year in which it is effective;
  • The plan is operated consistently with the amendment terms until the amendment is adopted; and
  • No amendment with retroactive effect is adopted after Dec. 31, 2022.


This post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.