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At-Home COVID-19 Tests are Eligible Medical Expenses

September 16, 2021

On September 10, 2021, the IRS issued a reminder that the cost of home COVID-19 tests are eligible medical expenses that can be reimbursed under a health FSA, HSA, HRA, or Archer MSA.

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At a Glance

On September 10, 2021, the IRS issued a reminder that the cost of home COVID-19 tests are eligible medical expenses that can be reimbursed under a health FSA, HSA, HRA, or Archer MSA. The IRS also reminds taxpayers that the costs of personal protective equipment (PPE), like masks, hand sanitizer and sanitizing wipes, when purposed to prevent the spread of COVID-19, are also eligible medical expenses.

At-Home Covid-19 Tests, Masks, Hand Sanitizer & Sanitizing Wipes

The IRS reminds taxpayers that the cost of home testing for COVID-19 is an eligible medical expense that can be paid or reimbursed under health flexible spending arrangements (health FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs), or Archer medical savings accounts (Archer MSAs). That is because the cost to diagnose COVID-19 is an eligible medical expense for tax purposes.

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.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.

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