In March 2021, the IRS released Announcement 2021-7, which qualifies PPE bought for the primary purpose of fighting COVID-19 as eligible medical expenses under section 213(d) of the Internal Revenue Code. The announcement allows specific items to be bought with (or reimbursed by) a Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), or Health Savings Account (HSA). Learn more about COVID-19 PPE as an eligible medical expense.
COVID-19 PPE
As the U.S. and the world have tried to minimize the risks of catching COVID-19, items such as face masks and hand sanitizers have become essential. The IRS announcement allows for face masks, hand sanitizers, and disinfecting wipes to be purchased with an FSA, HRA, or HSA. Also included in that announcement is that people can claim those expenses as tax-deductible items on their tax returns. There are a couple of restrictions: these PPE items must be purchased specifically to fight COVID-19 and they can be for personal use only.
Another thing to keep in mind is that there is no double-dipping. You cannot submit a claim for reimbursement from your employer-sponsored benefit account and also claim the items on your tax return.
View a list of qualified healthcare expenses for FSA, HRA, and HSA accounts.
COVID-19 PPE Cost and Retailers
The cost of face masks, hand sanitizers, and sanitizing wipes varies by retailer. There is a wide range of pricing for disposable face masks, but they are generally listed at $10-$20 for a package of 50. Hand sanitizer bottles generally range from $5-$10. A package of sanitizing wipes could range from $3-$5.
You can buy online or in store from various retailers, including CVS and Walgreens (among others), using your benefits debit card or another payment method.
Receipts
It is always a good idea to keep your receipts. Your benefits administrator may need to verify your benefits card purchase of COVID-19 PPE. If you used cash or check, you will need the receipt for your reimbursement claim.
Your receipt and claim form should include:
- Who? Who was the purchase intended for?
- What?: What is the name of the item or service?
- When?: On what Month, Day, and Year was the purchase made?
- Where?: Where did you buy the items? Make sure the address and store name is included.
- How much?: How much did the item or service cost?
Questions
If you have any question or concerns, reach out to your benefits administrator for help.
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