Lady with face mask
ComplianceTax & AccountingApril 01, 2021

Health Savings Accounts: Qualified expense list expanded to include COVID-19 protective equipment

On March 26, 2021, the Internal Revenue Service (IRS) posted Announcement 2021-7 which indicates amounts paid for personal protective equipment such as masks, hand sanitizer, and sanitizing wipes which will be used for the primary purpose of preventing the spread of COVID-19 are treated as amounts paid for medical care under Section 213(d) of the Internal Revenue Code. Therefore, an amount taken from a Health Savings Account (HSA) by an account owner to pay for such items, or to reimburse himself/herself for expenses already incurred for the purchase of such items, is considered an eligible expense, considering the personal protective equipment is used by the HSA owner, his/her spouse, or his/her dependents.

It is not an HSA custodian/trustee’s responsibility to determine whether an expense is an eligible expense, it is the HSA owner’s responsibility to make this determination. Ideally, an HSA owner will consult with his/her tax or legal adviser to make this determination.

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider the Wolters Kluwer IRA Library or on-demand video training offered on a variety of topics. Go here to learn more about training opportunities available to you, or you can call us at 1-800-552-9408.
Randy Heidmann
Senior Specialized Consultant, Tax Advantaged Accounts, Compliance Center of Excellence
With more than 40 years of industry experience, Randy Heidmann has helped hundreds of financial organizations create, implement and maintain their tax-advantaged accounts programs.