https://www.bay-biz.com/wp-content/uploads/2013/04/Bay-Business-Group4.png 0 0 baybiz https://www.bay-biz.com/wp-content/uploads/2013/04/Bay-Business-Group4.png baybiz2014-01-06 16:03:522014-01-06 16:03:52IRS announces new FSA rule
IRS announces new FSA rule
Flexible spending accounts (FSAs) allow taxpayers to set aside pre-tax dollars to pay for out-of-pocket medical expenses. The drawback has been the fact that unused amounts each year are forfeited. Plans could provide a 2½ month grace period to use up unspent set-asides.
Now a change announced by the IRS adds more flexibility to these accounts. Plans can be modified by employers to allow up to $500 of unused amounts to be carried over into the following year. Health FSAs cannot have both the old 2½ month grace period and the $500 carryover; they can have one or the other (or neither).