Know Your FSA Deadlines to Avoid Losing Money
The Dependent Care and Health Flexible Spending Accounts (FSA) programs allow enrolled employees to save on income taxes by taking money from their paychecks each month to cover certain eligible expenses. There are important differences between the plans, though, in what happens to money remaining in your account at the end of the plan year.
Dependent Care FSA Grace Period Ends Today (March 15)
If you had money left in your Dependent Care FSA at the end of 2016, you have a grace period to use the balance. You have until today (March 15) to spend the money in your account on eligible expenses, and until April 15 to submit your claims. Remaining funds cannot be carried over past the grace period, even if you re-enrolled in the Dependent Care FSA.
Health FSA Carryover Rules Explained
If you were enrolled in the health FSA through Dec. 31, 2016, you are allowed to carry over up to $500 of unused funds to the next plan year. With the carryover, if your balance is $500 or less, you do not have to worry about losing money when the plan year ends.
You had until Dec. 31 to incur eligible expenses for the 2016 plan year, and you have until April 15 to file claims for 2016 expenses. After the April 15 deadline, unused funds up to $500 will carry over to the 2017 plan year and be available for reimbursement in early May. Unused funds greater than $500 will be forfeited.
Employees who did not re-enroll in the Health FSA for 2017, must have at least $25 remaining in their account after the April 15 deadline to be able to carry over funds to the next plan year. Funds less than $25 are forfeited, and employees may only carry over funds (up to $500) for one year.
For more details, see the Flexible Spending Accounts page on UCnet.