December 17, 2013
With the end of the year on the horizon, many individuals with flexible spending accounts (FSAs) are scurrying to spend residual funds to avoid “losing” them, in accordance with IRS regulations. However, the regulations have now changed with the IRS easing the “use-it-or-lose-it” rule for health flexible spending plans. Individuals with FSAs can now carry over a maximum of $500 to the following year without forfeiture. So now, employees will not have to rush to clean out their accounts by the end of the year, or by March 15 of the following year, if their flexible spending plan has adopted this grace period.
It is important to note that an employer cannot offer a FSA carryover provision and an FSA grace period at the same time. In order to allow for this $500 carry over, employers must amend their plans to adopt the change. However, if an employer’s FSA plan currently allows for the grace period, that provision must be dropped in order to allow for the $500 carryover adoption.
Employers can implement the carryover for 2013 as long as the flexible spending plan is amended by the end of 2014. However, if the plan currently allows the grace period up until March 15, then the plan must be amended by the end of 2013 to formally eliminate this provision.
If you have any questions about this information, please contact us. We are always here to help.
Working from home has increased in popularity over the past several years. But today, amidst the COVID-19 crisis, it’s not only popular, but required for many. Moving from a hustle-and-bustle professional workspace to a home office can be a major transition for many. To help you make the move successfully, here are a few tips to reduce distractions while working from home:
If April 15 always seems to sneak up on you, get out in front of this year’s tax deadline and file early. Here are a few top reasons why you should…
The new budget bill passed by Congress on December 20, 2019 impacted both retirement and college savings plans. While many are still waiting for further guidance from the IRS on several details of the bill, we compiled a short list of the major changes that may affect you.