On March 26, 2020, the IRS announced that the amounts you paid to purchase personal protective equipment (PPE) to protect against the spread of COVID-19, such as face masks, hand sanitizer, and disinfecting wipes are eligible to be deducted as medical expenses on your 2020 tax return.
The IRS advises that taxpayers may be eligible to claim this deduction if their medical expenses exceed 7.5% of their adjusted gross income for the year. Note, however, that if your insurance covered your PPE expenses, you cannot claim these amounts as medical expenses on your tax return. If your insurance only partially covered these expenses, the amount you paid out of pocket may be claimed as a deduction. However, as with all tax matters, check with your accountant or tax preparer for guidance.
The IRS also clarified that certain health plans, including health flexible spending arrangements, Archer medical savings accounts, health reimbursement arrangements, or health savings accounts may be amended to cover amounts paid for PPE. Consult with your health plan to find out if your plan has been amended to cover PPE expenses.
For additional information on COVID-19-related tax breaks, see LR’s What You Need to Know Now posting here discussing the federal tax break for workers who received unemployment benefits in 2020. Tax and benefits laws can be complicated and you may want to speak with your accountant or tax adviser about how the new law affects you.
Disclaimer: This post does not constitute tax advice and you should check with your accountant or tax preparer regarding how these new rules apply to you.