First, oin Announcement 2021-7 PDF, the IRS said the purchase of PPE, including masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of the coronavirus are deductible medical expenses. These amounts can also be paid or reimbursed under health flexible spending arrangements, Archer medical savings accounts, health reimbursement arrangements or health savings accounts.

The agency also said a variety of  student financial aid grants stemming from the pandemic do not need to be included in their gross income. These include financial assistance  from a federal agency, state, Indian tribe, higher education institution or scholarship-granting organization, including a tribal organization.

Students should not reduce o qualified tuition and related expenses by the amount of such grants. If any portion of grants are used on or before December 31, students may be entitled to claim a tuition and fees deduction or the American Opportunity Credit or Lifetime Learning Credit on their 2020 tax returns. The deductions are not available for future tax years

Because students do not need to include the grants in gross income, higher education institutions do not need to provide Forms 1099-MISC and also do not need to report grants in Box 5 of Form 1098-T. However,  institutions must include qualified tuition and related expenses paid by emergency financial aid grants awarded to students in Box 1 of Form 1098-T.