FSA ELIGIBLE EXPENSES 2021 PLUS

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Newfront shall have no liability for the information provided. Any recipient shall be responsible for the use to which it puts this document. It is not intended to provide advice or address the situation of any particular individual or entity. The information provided is of a general nature and an educational resource. She works closely with internal staff and clients regarding compliance issues, providing information, education and training. Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. Participants would then tax the above-the-line-tax deduction for the contributions when they file their federal income tax return.

FSA ELIGIBLE EXPENSES 2021 PLUS

Participants can contribute up to the maximum of ,550 for single coverage or ,100 for family coverage (defined as employee +1 other dependent), plus an additional ,000 catch up contribution if they are age 55 by the end of 2020. Participants in a HDHP who were eligible to contribute to the HSA in 2020 are able to make 2020 contributions directly to the HSA vendor (i.e., outside of payroll) by the extended tax filing deadline. The postponement of the tax filing deadlines also automatically postpones to the same date, the deadline for taxpayers to make 2020 contributions into their HSAs. In Notice 2021-21 the IRS recently announced the postponement of the due date for filing federal income tax returns (Form 1040) from Apto May 17, 2021. Postponement of Federal Tax Filing Due Date to Allows Additional Time to Make 2020 HSA Contributions

(Note that no amendment is required to an HSA because those are individually owned accounts, and therefore the ability to reimburse COVID-19 PPE on a tax-free basis applies automatically by virtue of its inclusion under §213(d).)

We expect the health FSA vendors and HRA vendors will be providing the option to amend the plan to allow these as eligible expenses in the near future.

For example, a calendar year health FSA or HRA that begins reimbursing COVID-19 in 2021 would need to adopt the amendment no later than December 31, 2022. The adoption date must not be later than the last day of the first calendar year beginning after the end of the plan year in which the plan begins reimbursing COVID-19 PPE expenses. The amendment can be adopted retroactively on or before Decemfor expenses incurred on or after January 1, 2020. This addition is optional for the health FSA and HRA, and therefore employers must amend the plans if they would like them to reimburse employees’ COVID-19 PPE expenses. The IRS recently released Announcement 2021-7 notifying taxpayers that amounts paid for personal protective equipment (PPE) such as masks, hand sanitizer, and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 now qualify as medical care expenses under § 213(d) of the Internal Revenue Code.īecause these COVID-19 PPE costs are now considered to be medical care expenses, they are also eligible to be paid or reimbursed under a health FSA, HRA, or HSA.

Fsa eligible expenses 2021