New Law Allows Pre-Tax Expense Account Balances to Carryover to 2021
Pre-tax expense accounts typically have use-or-lose provisions, but a law passed in December offers good news. If you had a balance remaining in your 2020 Medical/Dental Expense Account (MDEA) or Dependent Care Expense Account (DCEA), they will automatically carryover to this year’s expense account. Here are a few exceptions and things to note:
– No limit to MDEA carryover. The law increases the maximum allowable carryover amount from $550 to your full unused 2020 MDEA balance to this year. This only applies to employees who contributed their full election in 2020.
– DCEA funds can carryover and be used for older children. The law allows you to carryover your 2020 unused balance to 2021, which is normally not allowed. This change is only for 2020 balances. The law also allows you to use this account for dependents up to age 14; this applies to 2020 and 2021. The age limit is 13 for 2022.
– The deadline to submit 2020 reimbursement requests is Feb. 28, 2021. If you wish to get reimbursed for an expense that occurred in 2020, the deadline to submit your request is still Feb. 28, 2021. This applies to both the MDEA and DCEA. Visit 121 Benefits website for reimbursement forms.
– No action is needed on your part. 121 Benefits, our vendor who administers our pre-tax benefits, will automatically carryover eligible balances to your account. If you have any questions, please contact them at 612-877-4321 or 800-300-1672.