"Wouldn’t carrying forward $1,500 from 2020 into 2021 then not result in being taxed on the $1,000 if used during the grace period for qualified expenses?"
Well, yes, except you have already spent the money in 2020. You don't have any money (beyond the $500 that you did not spend) to carry forward to 2021.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
