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Benefits & Executive Comp

IRS Allows Flexibility for Health, Dependent Care Programs

Feb. 18, 2021, 8:31 PM

Employees can make changes to tax-advantaged spending accounts for health and dependent care under a notice released Thursday by the Internal Revenue Service.

Notice 2021-15 provides that cafeteria plans of employee benefits can allow employees to make a new election prospectively if the employee initially declined employer-sponsored health coverage. Employees can revoke current choices and make new choices to enroll in different health coverage sponsored by the same employer, the IRS said.

The guidance on Section 214 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 provides flexibility for carrying over unused amounts from 2020 and...

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