We present angularly resolved spectra of T Tau North and South in the 3 micron water ice feature and K-band. Most of the water ice absorption lies along the line of sight toward T Tau South, confirming that it is viewed through stronger extinction. A decrease in ice-band absorption toward T Tau S between December 1998 and January 2000, significant at the 2 sigma level, was associated with an increase in its near infrared flux. Br gamma emission is detected in T Tau North and South and H_{2} (2.12 micron) emission only toward T Tau South, consistent with previous studies of infrared companions to T Tauri stars. Our results suggest that the near IR variability of T Tau S is probably caused by both variations in accretion rate and variable extinction along the line of sight.