Stay safe and write it off
We’ve had a lot of customers recently asking us whether their N95 masks are tax deductible and it’s hardly surprising as the rules governing non-prescription healthcare tax law can be confusing. And we are pleased to say, if you itemize your taxes, you can claim the cost of personal protective equipment you buy to protect yourself and your family from COVID as a deduction. Masks, sanitizer, gloves and disinfectant wipes are now in the same category as other medical expenses. You can also deduct the cost of Covid testing. These deductions apply so long as they are not reimbursed by insurance or paid for out of tax-advantaged healthcare accounts
Normally non-prescription medical expenses (other than insulin) are not deductible. You cannot claim vitamins, supplements, over the counter medications and the like. But Congress made an exception for items bought during the pandemic and the Internal Revenue Service (IRS) made this explicit. Here is the news release.
Of course, like any deduction, it only applies if you itemize your deductions. With the standard deduction at $12,400 for single taxpayers, many people forgo itemization. But for those with deductions above and beyond that rate, it’s an attractive option.
Likewise, as with all medical deductions, you can only claim unreimbursed medical expenses if they exceed 7.5% of your adjusted gross income. But a couple of major medical expenses in a year or ongoing treatments not covered by insurance would push many people into that category.
FSA, HSA funds
Another benefit of the change in law is that you can now use tax-advantaged health flexible spending accounts, called health FSAs, health savings accounts (HSAs) and related vehicles to pay for PPE. But you cannot double dip. If you use those accounts they are no longer tax deductible.
Some categories of workers, including teachers, have additional benefits that don’t require itemization. Teachers can claim unreimbursed expenses for PPE purchases made after March 12, 2020, as an Educator Expense Deduction of up to $250 per person.