Save on Taxes with Flexible Spending Accounts
How to Set Up Your Flexible Spending Accounts for 2008
Your may enroll in a Health Care and/or Dependent Care FSA for 2008. Newly hired employees must enroll within their first sixty (60) days of employment and will be able to claim eligible expenses incurred after the effective date of their enrollment.
Calculate Expenses Carefully
Any unused amounts remaining in your flexible spending accounts will be forfeited. Balances cannot be transferred between the Health Care and Dependent Care FSAs or carried over to the next year.
How to Claim Your 2008 Calendar Year Expenses
For health care, only those services rendered between the dates of January 1, 2008 and March 15, 2009 can be claimed against your 2008 health care accounts; for dependent care, services must be rendered by December 31, 2008. If you begin an account mid-year due to a change in family status or enrollment as a new hire, eligible claims must be for services rendered after the effective date of your enrollment in the flexible spending account. The deadline to claim 2008 expenses is March 31, 2009.
Examples: Grace Period for Health Care FSAs
- USC has a calendar plan year. A participant elects $1,000 for a health care FSA for 2008, and has $200 left over as of December 31, 2008. The participant elects $1,500 for 2009. The grace period for the plan is through March 15 of the following plan year. The participant incurs a $300 expense during the grace period. The plan will pay $200 from the 2008 balance and $100 from the 2009 balance.
- The same facts exist as above, except the expense during the grace period is $150. The unused $50 from the 2008 balance is forfeited as of March 31, 2009.
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