People with unused funds in their 2020 and 2021 health flexible spending arrangements and dependent care assistance programs under Internal Revenue Code Section 125 can carry over those funds into subsequent plan years, the IRS said in a notice. Plans that allow this flexibility won't undermine their status as tax-advantaged arrangements, according to the notice providing guidance on The Taxpayer Certainty and Disaster Tax Relief Act of 2020, which passed along with a year-end spending bill in December 2020.
The notice provides guidance on other provisions of the law, including relief allowing people to make certain midyear changes to their plans that have years ending in 2021.
--Editing by Vincent Sherry.
For a reprint of this article, please contact email@example.com.