What if I haven't spent all that I've set aside for my dependant care FSA account and I quit?

Question

I've set aside about 2,000, and I've only spent about 800 so far and I'm going to change jobs. What will they do? Can I turn in receipts later?

Answer 1

You can turn in receipts through the rest of this year.

Answer 2

Only the expenses you incurred while you are a covered employee can be turned in.  The day you quit, you stop being covered.  The company will refuse any receipt that shows a date after you were terminated.

Answer 3

An FSA's coverage period ends either at the time the "plan year" ends for your plan or at the time when your coverage under that plan ends. Example: Loss of coverage due to a separation from the employer.

One major drawback is that the money must be spent within the coverage period as defined by the benefits cafeteria plan coverage definition. This coverage period is usually defined as the period that you are covered under the cafeteria plan during the "plan year". The "plan year" is commonly defined as the calendar year.

Any money that is left unspent at the end of the coverage period is forfeited back to the company; this is commonly known as the "use it or lose it" rule.

A second requirement is that all applications for refunds must be made by a date defined by the plan. If funds are forfeited, this does not eliminate the requirement to pay taxes on these funds if such taxes are required. For example, if a single person elects to withhold $5000 for child care expenses and gets married to a non-working spouse, the $5000 would become taxable. If this person did not submit claims by the required date, the $5000 would be forfeited but taxes would still be owed on the amount.