Are you about to getlaid off, quit your job, or retire?
Instead, you’ll be making those contributions with after-tax money, plus a 2% administrative fee.
Where Does My Unused Money Go?
altrendo images / Altrendo / Getty Images
Can I Use It Up Before My Job Ends?
Let’s say you’re leaving your job in March, and you want to use up your FSA.
Lets say you agreed to contribute $2,000 over the course of the year.
By February, youve contributed about $333 when you break your wrist.
It doesnt even count as taxable income.
What happens with the $1,667 you were supposed to contribute but didnt?
Your employer takes a $1,667 financial hit for it.
But, don’t feel too guilty.
Get Checkups
Get a checkupor several.
it’s possible for you to use your FSA funds to cover these out-of-pocket costs.
And don’t forget sunglasses!
Over-the-counter medications and menstrual products can now be purchased with FSA funds.
This rule change is permanent.
check that you ask questions and understand what’s needed before you count on your FSA funds for therapy.
Now is the time.
But there are various purchases that can be made to use up FSA funds.
The FSA funds do not have to be repaid in that case.
FSAs are typically funded from your paycheck before taxes are calculated.
In 2023, FSA contributions are limited to $3,050 per year, although employers can set lower limits.
Moreover, any unused HSA funds can be rolled over to the next year.
Internal Revenue Service.Revenue Procedure 2022-38.
Internal Revenue Service.Notice 2013-71andNotice 2015-87.
Congress.gov.H.R.133Consolidated Appropriations Act, 2021.
Internal Revenue Service.Notice 2020-29: COVID-19 guidance under 125 cafeteria plans and related to high deductible health plans.
Riley C, Ciepluch AC.Year-end budget bill provides welcome rules for flexible spending accounts.The National Law Review.
U.S. Congress.H.R.748, CARES Act.
(section 4402).
Merrill Lynch.HSAs explained: The top benefits of health savings accounts.
Healthcare.gov.Flexible spending account (FSA).
Internal Revenue Service.Publication 969 (2020), health savings accounts and other tax-favored health plans.
