For the first time, the IRS has now decided that it will allow employees to carry over up to $500 in their flexible spending accounts to the next plan year. The notice issued by the IRS on October 31, 2013 takes effect immediately and employers can amend their plans to allow carryover for this plan year. This change should remove one of the primary complaints against flex plans, and is something employers should make sure to mention to employees in the midst of ongoing open enrollment periods (of course this rule change should not be mentioned unless the employer actually amends its plan to take advantage of it).
Employers will have the option of allowing either carryover or a grace period, but cannot use both. Employers can pick amounts lower than $500 for the carryover (but not greater). The notice also makes clear that the $500 carryover amount cannot be stacked each year cheap womens nike air max 1. In other words, the most that can be carried over in any plan year is $500.
The full text of the IRS notice can be found here.
Save
About The Author
