The IRS issued Announcement 2021-07 to permit amounts paid for personal protective equipment (PPE), such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 to be treated as amounts paid for medical care under § 213(d) of the Internal Revenue Code (Code). Accordingly, these amounts are eligible for special tax treatment as stated below.

  • The amounts paid by an individual taxpayer for use by the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent(s) that are not compensated for by insurance (or otherwise) are deductible under § 213(a) provided that the taxpayer’s total medical expenses exceed 7.5% of adjusted gross income.
  • The amounts may 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). However, if an amount is paid or reimbursed under a health FSA, Archer MSA, HRA, HSA or any other health plan, it is not deductible under § 213. 

If an employer is interested in allowing this tax preferred treatment for a group health plan, including a health FSA and HRA, you should contact your flex administrator or other third-party administrator (TPA) to determine if a plan amendment is required. If so, the amendment to include PPE expenses for any period beginning on or after January 1, 2020 must be adopted not 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 can be adopted after December 31, 2022, and the plan must be 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.

If you have questions or need help, please contact one of our benefit consultants.


Check out our COVID-19 Resource Center for more resources and information.