Personal protective equipment bought to prevent the spread of COVID-19 can be treated by taxpayers as tax deductible medical expenses, the Internal Revenue Service (IRS) has confirmed. While the ongoing effects of the pandemic have already persuaded the agency to extend the tax season (opens in new tab) by a month until May 17, now taxpayers are being afforded the opportunity to deduct expenses against some of the additional spending that the health crisis is likely to have caused.
“The purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses,” the IRS said in a statement (opens in new tab).
How to qualify
Under the new advice, the IRS says the cost of protective equipment bought for use either by the taxpayer, their spouse, or their dependents that is not compensated for by insurance is deductible under § 213(a) provided that their total medical expenses exceed 7.5% of their adjusted gross income. Any such equipment purchased since January 1, 2020 is eligible for inclusion, the agency stated.
It was also confirmed that purchases of personal protective equipment are eligible to be paid or reimbursed under health flexible spending arrangements, health savings accounts, Archer medical savings accounts or health reimbursement rearrangements. However, they would then not be eligible as a tax deduction, because such plans and accounts already are typically funded by pre-tax contributions.
The news comes a month after the IRS confirmed (opens in new tab) that eligible teachers can deduct unreimbursed expenses for protective items bought to prevent the spread of coronavirus in the classroom. As well as face masks (opens in new tab), disinfectant, hand soap, and disposable gloves, educators can also claim for tape, paint or chalk to guide social distancing, physical barriers such as clear plexiglass, and air purifiers (opens in new tab). Purchases made after March 12, 2020 are eligible for the deduction of up to $250.
Other IRS COVID-19 advice
Amid the challenges created by the health crisis and a backlog of paper returns, the IRS has been urging Americans to file taxes online (opens in new tab) this year. The agency has been particularly clear in its advice that e-filing on its website or employing the best tax software (opens in new tab) is definitely the best option if people wish to avoid unnecessary delays in receiving their tax refunds.
Although this latest announcement could allow some Americans to claw money back on the outlay they’ve made on protective equipment, other deductions that filers may believe will apply to them because of how their lives have been affected by COVID-19 could have to think again. In particular, anyone who has been working from home the past year due to coronavirus may believe they are entitled to home office deductions (opens in new tab) - the reality, however, is that this deduction is only generally available to the self-employed, and not those who are employed but have recently been working remotely.