Question of the Week

Posted by BAS - 03 December, 2015

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Q.- Many of our employees are not going to use their full FSA balances. Can we refund the money to them if we withhold taxes?

A.- No. A condition of an employer setting up a flexible spending account plan is that amounts that are not used must be forfeited. Unused contributions cannot be refunded to a participant even if taxes are withheld. If amounts are not used within the plan year and affiliated grace period, they must be forfeited (subject to a plan¹s carryover provisions).


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