I put $1000 in a flexible spending account at my new job. I know I am getting braces in Feburary which is going to be covered (I made sure).
Anyway I plan on going to graduate school in Sept. and quit my job.
When I signed up for the account, they said I can use the whole thing right away (which I plan on doing so my monthly payments are cheaper)
Long story short, if I quit the job before the $1000 is deducted from my pay what happens? It would be in September, and the FS account goes to Dec (of next year) Would I just owe the remainder back to someone (it would be about $300?)
2007-12-22 09:59:22 · 4 answers · asked by silly 123 3 in Business & Finance ➔ Taxes ➔ United States
Your obligation to your employer is for the entire $1,000, normally to be offset in equal installments over the entire year. If you quit before you have fulfilled your obligation you will have the remainder offset from your final paycheck whether you have used the funds or not.
2007-12-22 10:27:44 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
Whether you will have to pay the remaining balance on your FSA account when you leave your job depends on the FSA plan document. Ask for a copy of it and see if there is a provision that you will pay any remaining balance due out of your last paycheck, or not.
There is no IRS requirement that you must pay back the employer, but your plan document may require it.
2007-12-22 18:55:13 · answer #2 · answered by ninasgramma 7 · 0⤊ 0⤋
If you are no longer at the job, they will no longer a paycheck to take deductions out of. They will not ask you to make up the money. (This is one of the risks the employer has with these accounts.)
Of course, if you quit before you have the dental work done, they won't reimburse you for it either.
2007-12-22 13:13:39 · answer #3 · answered by Anonymous · 0⤊ 0⤋
An FSA is authorized by Section 125 of the IRS Code.
2016-04-10 21:14:16 · answer #4 · answered by ? 4 · 0⤊ 0⤋