IRS greenlights reimbursements for masks, hand sanitizers, etc.

IRS Announcement 2021-7 allows for the reimbursement of masks and other types of personal protective equipment to protect against COVID-19.

Employees can use any of the following for reimbursements:

• health flexible spending arrangements (health FSAs)
• Archer medical savings accounts (Archer MSAs)
• health reimbursement arrangements (HRAs), or
• health savings accounts (HSAs).

What qualifies for reimbursements

Masks, hand sanitizer and sanitizing wipes all count as reimbursable.

IRS said in its announcement that these can also be deducted on individuals’ personal income taxes. But seeing as many folks have already filed their taxes, most are likely to go the reimbursement route.

Which makes it all the better that the Taxman also added some new extra flexibility when it comes to FSAs this year.

Remember, IRS Notice 2021-15 offered new extensions for these programs. So your company will now be able to:

• let employees carry over unused FSA amounts into the following plan year
• extend the permissible period for employees to incur claims for plan years ending in 2021, and
• allow for mid-year election changes for 2021.

No better time to make sure your finance team remembers all the limits for each of the types of plans with allowable reimbursements for masks and other personal protective equipment (PPE). You’ll find all the 2021 numbers here.