The IRS has granted relief for 125 cafeteria plans, health flexible spending arrangements and dependent care assistance programs.
In Notice 2020-29, the IRS has:
Notice 2020-33 increases the limit for unused health FSA carryover amounts from $500 to a maximum of $550, as adjusted annually for inflation.
The drawbacks? The rules are very specific, and the notices go into great detail on how exactly the new rules work. Fortunately, Notice 2020-29 contains examples so those who have elected the relevant plans can see more clearly how to take advantage of the new rules. A summary of the rules is available in the IRS Newsroom.
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