If I have $647 left in my 2020 dependent care FSA ...
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If I have $647 left in my 2020 dependent care FSA whose coverage period is 1 Jan 20 to 15 Mar 21, is this "money left in your account" if it's going to be spent in Feb?

I answered Yes to "Did I have a Flexible Spending Account to pay for child or dependent care?"  It asked me if I had any money left in the account at the end of the year.  I had $647 left over.  The coverage period of the 2020 dependent care FSA though is 1 Jan 2020 to 15 Mar 2021.  Should I put $647 or $0 for the money left over, if I intend to use all $647 on dependent care in February 2021?
3 Replies
Employee Tax Expert

If I have $647 left in my 2020 dependent care FSA whose coverage period is 1 Jan 20 to 15 Mar 21, is this "money left in your account" if it's going to be spent in Feb?

Since the tax filing period is January 1, 2020 through December 31, 2020, you could show the $647 balance left in your FSA account.

 

Your FSA contributions/distributions are not reported on your tax return, so this would not affect you either way.

 

Click this link for more info on FSA Dependent Care Accounts.

 

 

[Edited 1/18/20 | 4:12 pm]

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New Member

If I have $647 left in my 2020 dependent care FSA whose coverage period is 1 Jan 20 to 15 Mar 21, is this "money left in your account" if it's going to be spent in Feb?

Hello, thank you for your response.  So this question is asked of me at the end of inputting in my W2.  It asks me if my employer provided child care services, and then asks me

 

Did [I] have a Flexible Spending Account to pay for child or dependent care?

 

If I add the $647 value in here it changes my tax due/tax refund by about $200 to my benefit, so it looks like it is affecting me different depending on how I answer.

 

In the help file "How do I know if I had leftover money in my Flexible Spending Account?" it says

"We’re asking for the amount of money you either forfeited because you didn’t use it by the end of the plan year, or the amount your employer is going to allow you to carry over into next year’s FSA (uncommon)."  If the coverage period is Jan 1 2020 to 15 Mar 2021, I don't think this is considered "forfeited" as I can still use it, but is it considered an amount that my employer is allowing me to "carry over"?  I'm "carrying over" funds from one calendar year to the other, but it's not moving funds from the 2020 Plan to the 2021 Plan.  I'm just allowed to spend the 2020 funds until March 15 of 2021.

 

Going back to the actual TurboTax question, it states

"If you had any money left in your account at the end of the year, enter the amount here."

I had money left in my account; but what "end of the year" does it mean - end of the calendar year (1/1/20-12/31/20), or end of the coverage period (1/1/20-3/15/21)?  I think the problem here is that there's the unusual situation of COVID-19 leading to changes in the FSA program (FSAFEDS) and the coverage dates that they're allowing.

Employee Tax Expert

If I have $647 left in my 2020 dependent care FSA whose coverage period is 1 Jan 20 to 15 Mar 21, is this "money left in your account" if it's going to be spent in Feb?

The recent law has changed due to  COVID and no longer limited to that tax year. In addition, the $500 maximum is also gone. Your money is part of your current plan year and is not forfeited.

 

Many people were unable to use the funds so the law had to change.

 

Had you had any money left from the plan that ended in 2020, that would be the forfeited amount. Since your plan did not end in 2020, you have nothing to forfeit.

 

{Edit 1/18/2021 link removed| 3:31 pm PST]

 

 

 

 

 

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