Reminder: 2020 FSA Runoff Dates Can Extend into 2022 for Some Taxpayers, Dec. 23, 2021

Typically, taxpayers are advised to exhaust their health flexible spending account (FSA) funds by year-end—or run the risk of losing those funds under the "use it or lose it" rule. Most employers require employees to submit claims by year-end (or by the end of any applicable grace period). However, for 2020 plan years, employers may elect to extend this "runoff" period where employees can submit health FSA claims through the earlier of (1) the end of the COVID-19 outbreak period or (2) one year from the date the plan or deadline period would have begun. So, for 2020 calendar year plans with a March 31 runoff date, employers can extend the deadline to March 31, 2022 (if the COVID-19 outbreak is not declared "ended" by that date). Employers that sponsor health FSAs have discretion over whether to implement these extended runoff dates. For more information on the health FSA rules, see Q 8902.