The IRS has increased the health Flexible Spending Account (FSA) carryover amount. In Notice 2020-33, the IRS stated that the FSA carryover limit (currently fixed at $500) will now be indexed for inflation. For a plan year starting in 2020, the maximum unused amount that can be carried over to the next plan year starting in 2021 is $550. The tax code allows employers to offer FSAs to employees to help them pay for health care and dependent care costs not covered under an employer’s regular plan. Employers can amend their health FSA plan documents to provide for the carryover to the next plan year of the $500/$550 amounts remaining unused as of the end of the plan year. Call or visit our website for more information! www.mjscpa.com/
