During the ongoing coronavirus pandemic, many people have purchased personal protective equipment (e.g., masks, hand sanitizer, disinfectant, or sanitizing wipes) to prevent infection or spread of the virus or have bought home test kits to diagnose a potential existing infection. The IRS has issued guidance stating that the purchase of items necessary to diagnose or prevent coronavirus infection are treated as amounts paid for medical care under Code Section 213(d).
Consequently, protective equipment and testing kits can be purchased or reimbursed through health flexible spending arrangements ("health FSAs"), health savings accounts ("HSAs"), health reimbursement arrangements ("HRAs"), or Archer medical savings accounts ("Archer MSAs"). Alternatively, the cost of such items may be tax-deductible, so long as they are not compensated by insurance and the taxpayer's total medical expenses exceed 7.5% of adjusted gross income.
IR 2021-66, IR-2021-181
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