As students head back to school, now is a good time to remember that both parents and teachers can get beneficial tax treatment for the purchase of personal protective equipment (PPE), including masks, hand sanitizer, and sanitizing wipes.
Amounts paid for PPE used to prevent the spread of COVID-19 qualify as expenses for medical care under the Internal Revenue Code. Therefore, amounts paid by an individual taxpayer for PPE to be used by the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependents, and that are not compensated for by insurance or otherwise, are deductible provided that the taxpayer’s total medical expenses exceed 7.5 percent of adjusted gross income.
Additionally, amounts paid for PPE are deemed eligible expenses under a health flexible spending account (health FSA), health savings account (HAS), health reimbursement arrangement (HRA), and Archer medical savings accounts (Archer MSA). As a result, parents needing to buy these items for their children’s return to school can use their health FSA, HSA, HRA, or Archer MSA accounts to make purchases, or submit a reimbursement request for items previously purchased.
Eligible educators can deduct unreimbursed expenses for PPE items such as face masks, disinfectant, hand soap, hand sanitizer, disposable gloves, tape or paint to guide social distancing, physical barriers such as plexiglass, air purifiers, and other items recommended by the CDC to be used to prevent the spread of COVID-19. The rules permit eligible educators to deduct up to $250 of qualifying expenses per year, or $500 (but not more than $250 each) if married filing jointly and both spouses are eligible educators. This is an above-the-line deduction, meaning it is available even to taxpayers who do not itemize their deductions.
Eligible educators include any individual who is a Kindergarten through 12th grade teacher, instructor, counselor, principal, or aid in a school for at least 900 hours during a school year. The tax deduction is for expenses paid or incurred during the tax year, and it applies to unreimbursed expenses paid or incurred after March 12, 2020. The deduction can be claimed on the Form 1040, U.S. Individual Income Tax Return.
For more information, contact your local Cherry Bekaert tax advisor.
