What's the second best option for unclaimed Dependent Care FSA funds that missed the “run-out period”?

[iOne]

Ok, so it seems money left in a dependent care "flexible" savings account at the end of the plan year is donated to the employer.   And apparently last year's deadlines are not the same as this year for reporting.

Ok. Now what?

I thought TurboTax asked a question about unspent FSA funds: how can I get back to that question?

I get that the FSA money was deducted "pre-tax" from income, sent to the FSA custodian, and eventually transferred to the employer. 

• Is that transfer tax free for the Employer?
• If the employee has documented dependent care expenses within the plan year, is there a
  right way to report them in TurboTax to recover some of the tax benefit from the spending that was never reimbursed?

Unfortunately and unfortunately: the FSA custodians have every incentive to ensure the funds remain unspent.  Apparently it's pretty big money according to Money magazine (see article "Workers Lose $3 Billion a Year in FSA Contributions (and Employers Get to Keep It)"). 

Now what?

[Cynthiad66]

First step is to check with your employer for deadlines for using the money.  What happens to unspent money in an FSA?

In typical years, any unused money in your FSA at the end of the plan year is forfeited unless your employer gives you a 2.5-month grace period to spend the money. For health-care FSAs only, some employers allow you to carry over a certain amount (up to $550 for 2021) into the next year.

You should file the amounts over and above the FSA account for dependent care expenses.

You can get back to the question about whether you spent your FSA funds by following the ese instructions.

I am assuming that you had an entry in box 10 of your W-2, for your FSA contribution.

Go back to your W-2 interview (Federal->Wages & Income->Wages & Salaries) and click on Start or Revisit for "Wages and Salaries".

If you made an entry in box 10 of the W-2 (Dependent Care Benefits), then in the next several screens after the W-2, it will ask you if you have an FSA and how much money was left in it at the end of the year.