Due to the coronavirus (COVID-19) pandemic, millions of Americans have learned a new acronym: PPE. PPE stands for "personal protective equipment." It includes such items as face masks, hand sanitizer, and disinfectant wipes used to curb the spread of COVID-19.
PPE can be expensive. The IRS and Congress have come up with a couple of different ways for people to deduct PPE from their income taxes. Unfortunately, most taxpayers can't take advantage of these deductions.
The IRS says that PPE bought for the primary purpose of preventing the spread of COVID-19 is deductible as a medical expense if the cost is not reimbursed by insurance or an employer. This is great in theory. In practice, however, most people can't deduct their medical expenses because of the severe restrictions on this deduction.
First of all, medical expenses are deductible as a personal itemized deduction only if, and to the extent, they exceed 7.5% of your adjusted gross income. Medical expenses are broadly defined to include most out-of-pocket medical, dental, and other health-related costs, including health insurance. Nevertheless, unless your medical expenses are substantial, the 7.5% limitation eats up most or all of your deduction.
In addition, you may deduct your medical expenses only if you itemize your personal deductions in IRS Schedule A instead of taking the standard deduction. However, you should itemize only if all your personal deductions are more than the standard deduction.
The Tax Cuts and Jobs Act (TCJA) that went into effect in 2018 roughly doubled the standard deduction. For 2020, it is $12,400 for singles and $24,800 for marrieds filing jointly. The TCJA also eliminated or capped many personal deductions (not including medical expenses). As a result, very few taxpayers are able to itemize today: In fact, nearly nine out of ten take the standard deduction. So the vast majority of taxpayers can't deduct their medical expenses, even though they may now include PPE.
The IRS has an online tool you can use to see if you can deduct your medical expenses.
If you're a teacher and purchase PPE for classroom use, you're in luck. You may deduct your PPE expenses without itemizing or using the medical expense deduction.
Kindergarten through grade 12 teachers may deduct up to $250 each year for books, supplies, and other equipment they purchase with their own money for use in the classroom. This deduction is an “above-the-line” deduction you can take without itemizing, which makes it especially valuable. Congress has added to this special teacher deduction expenses for PPE. Only PPE purchased after March 12, 2020 qualifies. The total deduction, including PPE, is a maximum of $250. If a married couple are both teachers, they may each deduct $250 on their joint return, for a total of $500.
Note that the educator expense deduction is not available for homeschoolers, including parents teaching their children at home during the pandemic. It's only for professional educators who work at least 900 hours during the school year.
Many people have health savings accounts (HSAs), health reimbursement arrangements (HRAs), or flexible spending accounts (FSAs). These are tax-advantaged accounts into which they and/or an employer contribute money. Withdrawals or reimbursements from these accounts that are used for health-related expenses are tax-free. Such expenses include costs for PPE. But if an amount is paid or reimbursed under a health FSA, HRA, or HSA, or any other health plan, it is not also deductible as an itemized personal medical expense.