One year ago today, you couldn’t have found a face mask in my house. Today, we have an entire drawer in our kitchen dedicated to masks. And while the amount I have spent on gas and entertainment is down considerably year over year, I have spent my fair share on Etsy and other sites on superhero masks for my 5 and 7 year old (whatever it takes to get them to wear them all day at school, right?). And I have certainly spent more on hand sanitizer and Clorox wipes than I have collectively in the rest of my life. I doubt I am alone.
To those of you wishing someone would reimburse you for those items, your wish has been granted . . . well sort of. The IRS announced on Friday that masks, hand sanitizer, disinfecting wipes, and other personal protective equipment that were primarily purchased to stop the spread of COVID can be treated as medical expenses that are deductible on an individual’s tax return (to the extent the medical expenses exceed 7.5% of their adjusted gross income). What this also means is that the amounts are now reimbursable from HSAs, health FSAs, HRAs and Archer MSAs. So while in most cases you would be reimbursing yourself from an account to which you contributed, you can now at least do so on a tax advantaged basis.
So if you still have those receipts or can print them off Etsy like me, you can now reimburse yourself for any expense that you incurred on or after January 1, 2020. If you have a health FSA or HRA, the plan may need to be amended to allow such reimbursements depending on how it is drafted, so you will need to check with your employer. If you sponsor an FSA and want to amend it or have us review it to determine if an amendment is necessary to permit such reimbursement, please reach out to any Graydon benefits attorney.
