2020 PayFlex FSA debit card were shut off on Dec. 31, 2020. Consolidated Appropriations Act: FSA Relief. The Consolidated Appropriations Act, 2021 (H.R. The American Rescue Plan Act of 2021 includes an optional (but not required) temporary change for the calendar year of 2021 to increase the maximum pretax contribution limit from $5,000 to $10,500 for dependent care assistance programs (DCAPs). For individuals who are married but filing separately, the amount increases from $2,500 to $5,350. Please review the eligible expense list [list] to see what's covered under your Dependent Care FSA. 133, P.L. Plan sponsors that want to allow this … The bill increases the income exclusion for employer-provided dependent care assistance programs — for example, employee pretax contributions to dependent care FSAs — from $5,000 to $10,500 (and from $2,500 to $5,250 for a married individual filing a separate return) for 2021. Optional provision: The Consolidated Appropriations Act (CAA) 2021, temporarily allows for an eligible employee to be reimbursed expenses for dependents through age 13 (i.e., dependents who have not yet turned 14) for the 2020 plan year. The law includes several provisions that provide relief for health and dependent care flexible spending accounts. On May 10, 2021, the Internal Revenue Service issued guidance Notice 2021-26 regarding the taxability of dependent care assistance (DCFSA) programs for 2021 and 2022. As noted in our prior blog posts here and here, the Consolidated Appropriations Act of 2021 (the “Act”) includes several types of relief for flexible spending accounts (“FSAs”), impacting both health and dependent care FSAs. The also makes changes in the Paycheck Protection Program (PPP) and other financial assistance options that have tax implications. FSA and Dependent Care: Consolidated Appropriations Act 2021 On December 27, 2020, the latest COVID relief bill, the Consolidated Appropriations Act, 2021, was signed into law. The Consolidated Appropriations Act of 2021 (CAA) (P.L. 116-260) funds the government for its fiscal year ending September 30, 2021, and makes major tax changes for businesses. Background For many reasons, the pandemic affected the ability for people to use the money set aside in their DCFSA plans in 2020 and 2021. Increased income exclusion for dependent care programs for 2021. * Optional provision: The Consolidated Appropriations Act (CAA) 2021, temporarily allows for an eligible employee to be reimbursed expenses for dependents through age 13 (i.e., dependents who have not yet turned 14) for the 2020 plan year. Under the Consolidated Appropriations Act, 2021 (CAA), signed into law on Dec. 27, 2020, an employer can amend its DCFSA for 2020 and/or 2021 … Due to temporary new provisions adopted by the State Insurance Committee, for participants who are still employed, your full medical FSA or limited purpose FSA balance will carryover into 2021 (even if the balance is greater than $500, which is a change from previous rules). Important 2020 FSA and L-FSA Carryover Information. 116-260) signed into Law on December 27,2020 provides temporary relief for taxpayers that were unable to spend down their Dependent Care by the end of the year and would risk forfeit of their contributions. 116-260), signed into law on December 27, 2020, provides temporary relief for employees that were unable to spend down their dependent care and health FSAs by the end of the plan year … 133, P.L. The new Consolidated Appropriations Act, 2021 (H.R.
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