Blog

Get a Free Consultation

Welcome to our Blog

Stay up to date with the latest in the tax world!

IRS Provides More Flexibility for Workers Using FSAs

Monday, May 18, 2020

 

If you have ever worked on a job and used the benefits offered by the job, you are likely aware of the benefit of having an FSA, Flex Spending Arrangements (also called Flex Spending Account). Being able to set aside money for healthcare expenses tax-free is a great benefit and prevents having to come out-of-pocket for every health-related expense. With recent temporary changes to section 125 cafeteria plans due to the COVID-19 pandemic, the IRS has taken measures to assist taxpayers to deal with unforeseen needs.

On May 12, the IRS released new guidelines extending the claims period for FSAs and dependent care assistance programs and allows taxpayers to make changes mid-year. The measure is designed to address unanticipated changes in expenses that have occurred because of the pandemic situation. In summary, IRS Notice 2020-29outlines several benefits for taxpayers.

  • Claims periods have been extended to allow taxpayers to apply unused amounts in health FSAs to medical care expenses incurred through Dec. 31, 2020
  • Taxpayers can now react to changes in need from COVID-19 with mid-year changes to coverage elections for healthcare, health FSAs, and dependent care assistance programs
  • Applying earlier relief to high deductible health plans to cover expenses related to COVID-19 pandemic as well as a temporary exemption for telehealth services retroactively to Jan. 1, 2020

In addition to the extension of claims deadlines, Executive Order 13877 has directed the Secretary of the Treasury to “issue guidance to increase the amount of funds that can carry over without penalty at the end of the year for flexible spending arrangements.”

 

Outlined fully in Notice 2020-33, the order increases the limit of unused carryover funds for health FSAs from $500 to $550, as adjusted annually for inflation.

As with any official tax-related issues, we always recommend consulting tax professionals. In the current environment, with so many changes, Alliance Tax Solutions is offering free consultations to help you make the right choices concerning your taxes. Call us at (404) 592-1227 to speak with one of our seasoned tax professionals or request your free consultation online

 

Advocates of Love Charity

When you signup with Alliance Tax Solutions, a portion of our proceeds go to support this amazing organization

Advocates of Love is the only children’s home to help orphan and vulnerable children in the Samana Province, Dominican Republic. Founded by Mike Clark in 2013, this charity has provided care and eduction for children in one of the most povery stricken areas.

Click Here To Learn More

 

CALL TODAY (833) 452-0411 FOR TAX HELP, OR LET US CONTACT YOU

Error: Contact form not found.

“By entering your phone number and clicking the “Get Started” button, you provide your electronic signature and consent for Alliance Tax Solutions or its service providers to contact you with information and offers at the phone number provided using an automated system, pre-recorded messages, and/or text messages. Consent is not required as a condition of purchase. Message and data rates may apply.”

Contact Us Now