![]() ![]() Always contact your employee benefits broker or trusted adviser for insurance-related questions. The above information does not constitute advice. Reach out to your Hylant representative for further information. December 31, 2021, for calendar year plans wishing to amend their plans retroactively to January 1, 2020. In general, such amendments will need to be adopted by December 31 of the year following the plan year in which the change is effective, i.e. Group health plans (including health FSAs and HRAs) may be amended to provide for reimbursement of COVID-19 PPE expenses incurred on or after January 1, 2020. However, if your plan is more descriptive on the types of expenses that are eligible, and you would like to allow for the reimbursement of COVID-19 PPE, an amendment will most likely be required. If your plan document currently allows for reimbursement of all medical expenses under § 213(d) of the Internal Revenue Code, then no amendment is necessary. It is important to note that if an amount is paid or reimbursed under any of the above methods, or any other health plan, it will not be considered a deductible medical expense on an individual’s taxes. However, health FSAs and HRAs are types of group health plans set up by employers and, therefore, do not necessarily include all § 213(d) medical expenses. HSAs are individually-owned accounts and can automatically reimburse all § 213(d) medical expenses. Health reimbursement arrangements (HRAs).If your AGI is 50,000, the first 3,750 of your medical and dental expenses are not. Health flexible spending accounts (health FSAs) You also have another 4,875 of medical expenses for a total of 5,000 in eligible medical and dental expenses.Additional information is available on IRS.gov. The IRS said Friday that face masks, hand sanitizer and disinfectant wipes bought to curb the spread of COVID-19 are tax-deductible medical expenses. To qualify for reimbursement under a tax-favored account, expenses must be incurred on or after January 1, 2020. The IRS also reminds taxpayers that the costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs, or Archer MSAs. In addition, amounts paid for COVID-19 PPE, incurred on or after January 1, 2020, qualify to be reimbursed by tax-favored accounts. The total medical expenses exceed 7.5% of adjusted gross income.The PPE is not compensated for by insurance or other means.This announcement allows for amounts paid for COVID-19 PPE to be counted as deductible expenses for the taxpayer if: These changes are automatically incorporated in § 213(d) of the Internal Revenue Code as eligible expenses. The Internal Revenue Service has issued Announcement 2021-7, clarifying that amounts paid for certain personal protective equipment (PPE) - such as masks, hand sanitizer and sanitizing wipes - used for the primary purpose of preventing the spread of coronavirus (COVID-19) are deductible medical expenses. The IRS has issued a statement stating that personal protective equipment counts as deductible medical expenses. ![]()
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