" The IRS has finally weighed in … allowing to be treated as qualifying medical expenses under Internal Revenue Code Section 213," wrote Diane Dygert, a partner in the Chicago office of law firm Seyfarth. However, "this change, unlike previous bills introduced by Congress, is not tied to a state of emergency and a permanent change to eligibility," Health-E Commerce said.
to correct this gap in FSA/HSA product eligibility," the firm said in a statement, which noted that proposed bipartisan legislation to allow for PPE to be FSA/HSA eligible, and which featured similar provisions to those in Announcement 2021-7, had failed to advance through Congress. The culmination of a year-long campaign . Centers for Disease Control and Prevention as protection against the spread of COVID-19 were not widely eligible for purchase with FSA or HSA funds," according to Health-E Commerce, a consumer health and wellness advocate and online retailer. "During the current public health crisis, consumers were shocked to find that the very products recommended by the U.S. Separately, the IRS delayed until May 17 the deadline to make 2020 prior-year contributions to HSAs and other individually owned tax-advantaged accounts (see the box below).
However, if an amount is paid or reimbursed under a health FSA, HSA, HRA or any other health plan, it is not deductible for tax purposes. The IRS cleared up an issue about benefit account reimbursements for nonprescription, over-the-counter personal protective equipment (PPE) that has been a source of confusion since the start of the COVID-19 pandemic.Īnnouncement 2021-7, issued March 26, the IRS clarified that purchases of PPE such as face masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus, "for use by the taxpayer, the taxpayer's spouse, or the taxpayer's dependents that are not compensated for by insurance" are deductible from income for tax purposes, "provided that the taxpayer's total medical expenses exceed 7.5 percent of adjusted gross income."Īs tax-deductible expenses, the amounts paid for PPE are also eligible to be paid or reimbursed under health flexible spending accounts (health FSAs), health savings accounts (HSAs) or health reimbursement arrangements (HRAs).
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