Dependent Care FSA - missed filing deadline, IRS DIDNT extend deadline. Lost 5K :(

[hsingh80]

Thank you.

Another thing HR was saying that they already closed their books and there would be audit/compliant issues.

They saying its May and deadline was march 31st :( 

So, in that case, what can I tell them as an option for me.

Please suggest.

I will send them an email again and try my luck 

[ajais]

I am also in the same situation like yours. My employer has not changed the deadline but my wife's has extended until Sep 2020. 

It will be helpful to look at the following links (https://healthequity.com/coronavirus/ and https://www.federalregister.gov/documents/2020/05/04/2020-09399/extension-of-certain-timeframes-for-...

Department of Labor (DOL) Issues COVID-19 Relief

On April 28, 2020, the Department of Labor (DOL) Employee Benefits Security Administration (EBSA) announced the time periods in which members can submit claims for coverage, elect and pay for COBRA continuation coverage, enroll in group health plan coverage, and file appeals for adverse benefit determinations are extended. The EBSA also provided guidance allowing additional time in which a group health plan sponsor or plan administrator can provide certain notices, disclosures, or other documents. Please see the FAQs below for more information.

Q: What is the impact to FSA/HRA Claims?
A: Any days within the "Outbreak Period" (starting March 1, 2020) are disregarded when calculating any of the following FSA/HRA plan periods:

• Deadlines to submit claims subject to applicable claims procedures;
• Deadlines to file appeals of adverse benefit determinations;
• Deadlines to file external requests for review of adverse benefit determinations.

[Anonymous]

@BillM223 

I am in the same situation, missing filing the Dependent care FSA claim by March 31st 2020. I was planning to enter $5000 as forfeited amount so that it gets added Line 14 of Form 2441 and I can avail the max Child and Dependent Care credit possible.

But the IRS instruction for 2441 seems to indicate forfeiture means only the unused funds in the Dependent care FSA.

From https://www.irs.gov/instructions/i2441, 

under  Line 14.

"Any amount you forfeited. You forfeited an amount if you didn't receive it because you didn't incur the expense. Don't include amounts you expect to receive at a future date."

Do you think its safe to add the amount I didn't claim as forfeited ?

[BillM223]

"Any amount you forfeited. You forfeited an amount if you didn't receive it because you didn't incur the expense. Don't include amounts you expect to receive at a future date."

Not making the claim is the same as not incurring the expense.

This is the definition of forfeited funds. Forfeited funds in this case are funds that were put into your dependent care FSA that were never used by the due date for claims, for whatever reason.

[Anonymous]

Thanks for the quick response @BillM223 

If I enter $5000 as the forfeited amount should I update income to add the $5000 (which is reported in box 10 of the W2) ? It looks like IRS doesn't require the forfeited funds to be added back to the income.

I hope its not required. In that case I can get the max Child and Dependent Care credit. It would be $1200 for me since I have two kids (20% of $6000).

[BillM223]

No, don't update income. Let TurboTax do any automatic adjustments necessary.

No, the forfeited amount is not added back to income. Your issue is that you also don't receive it - the employer reabsorbs it.

This is fair - you don't receive the money so you don't report it as income.

Yes, if you spent more than $6,000 on child care and have two kids, then the max credit is (in your case, depends on AGI) 20% of 6,000 = $1,200.