If you’re a participant in a Flexible Spending Account (FSA), you may have heard about the rollover rule that was passed in 2013. This rule allows for unused funds in your FSA account to be rolled over and used in the following year. Since this rule was passed, many people have benefited from the flexibility it offers. But what happens when 2023 rolls around? What changes will there be to the FSA rollover rules? Let’s take a closer look to find out.
What is an FSA?
An FSA is an employer-sponsored account that allows you to set aside pre-tax money to use for certain medical and dependent care expenses. The money you set aside is not subject to federal income taxes, Social Security taxes, or Medicare taxes, making it a great way to save money. Depending on your employer’s plan, you may be able to use your FSA for a variety of expenses, including copayments, deductibles, and other medical expenses. The money you set aside in an FSA can be used throughout the year and any unused funds will be forfeited at the end of the year.
What is the Current FSA Rollover Rule?
The current FSA rollover rule was passed in 2013 and allows you to rollover up to $500 of unused funds from one year to the next. This means that if you have unused funds at the end of the year, you can rollover up to $500 of those funds and use them in the following year. However, if you have more than $500 in unused funds, you will forfeit the amount that exceeds the limit. This rule has been a great benefit to many people, giving them more flexibility with their FSA funds.
What Changes are Expected for the FSA Rollover Rule in 2023?
In 2023, the rollover rule is expected to change. Instead of a $500 limit, FSA participants will be allowed to rollover up to $550 of their unused funds. This means that if you have unused funds at the end of the year, you can rollover up to $550 of those funds and use them in the following year. This change is expected to benefit many people, giving them even more flexibility with their FSA funds.
What Other Changes are Expected in 2023?
In addition to the rollover rule, there are several other changes that are expected to take place in 2023. One of the most significant changes is the elimination of the “use it or lose it” rule. This rule requires that FSA participants use all of their funds by the end of the year, or else they will forfeit them. With the new rule, participants will be able to carryover any unused funds from one year to the next. This change is expected to benefit many people, as it gives them more flexibility with their FSA funds.
What Other Changes Are Expected?
In addition to the rollover rule, there are several other changes that are expected to take place in 2023. One of the most significant changes is the elimination of the “use it or lose it” rule. This rule requires that FSA participants use all of their funds by the end of the year, or else they will forfeit them. With the new rule, participants will be able to carryover any unused funds from one year to the next. This change is expected to benefit many people, as it gives them more flexibility with their FSA funds.
Conclusion
The FSA rollover rule in 2023 is expected to be beneficial for many people. By allowing participants to rollover up to $550 of their unused funds, they will have more flexibility with their funds. In addition, the elimination of the “use it or lose it” rule will give participants more time to use their funds. With these changes, many people are expected to benefit from the new rule. It’s important to keep in mind that the new rule will not take effect until 2023, so it’s important to stay informed about any changes that may occur in the meantime.