August 27, 2020 10:25 pm

IRS Can’t Change Reimbursement Deadline for Dependent Care FSAs

Dependent care flexible spending accounts (FSAs) set the deadline for submitting requests for reimbursement. For example, a company’s plan may limit reimbursements to requests submitted within 30 days of the close of the year. The IRS has made it clear (INFO 2020-0005) that it lacks the authority to change the plan’s deadline for submissions. Employees with outstanding dependent care expenses should be mindful of the submission deadline.

Note: Medical FSAs can permit carryovers up to a set limit (e.g., $550 for unused amounts in 2020) if they do not provide for a grace period.

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Tax Glossary

Accelerated depreciation

Depreciation methods that allow faster write-offs than straight-line rates in the earlier periods of the useful life of an asset. For example, in the first few years of recovery, MACRS allows a 200% double declining balance write-off, twice the straight-line rate.

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