The following provisions, which apply only to plan years 2021
and 2022, are enacted pursuant to §214 of the Federal Taxpayer
Certainty and Disaster Tax Relief Act of 2020 and other relevant federal
law.
(1) Dependent care reimbursement plan.
(A) Unlimited carryover. A participant may carry over
to plan year 2021 any unused amount in a dependent care reimbursement
account that would have expired at the end of plan year 2020 and may
carry over to plan year 2022 any unused amount in a dependent care
reimbursement account that would have expired at the end of plan year
2021.
(B) Grace periods. Because of unlimited carryover relief,
grace periods for dependent care reimbursement accounts do not apply
for plan years 2020 and 2021.
(C) Dependent age extension. For plan years 2020 and
2021, the maximum age of a dependent is 14.
(D) Prospective mid-year election changes. During calendar
year 2020 and through plan year 2021, a participant may increase or
decrease contribution amounts or end enrollment for a dependent care
reimbursement account without a qualifying life event. A participant
may not reduce contributions to an amount less than the total of:
(i) the amount of payroll distributions in the account,
if any; and
(ii) the amount of reimbursement the participant has
received, if any.
(2) Health care reimbursement plan.
(A) Unlimited carryover. A participant may carry over
to plan year 2021 any unused amount in a health care reimbursement
or limited purpose health care reimbursement account that would have
expired at the end of plan year 2020 and may carry over to plan year
2022 any unused amount in a health care reimbursement or limited purpose
health care reimbursement account that would have expired at the end
of plan year 2021.
(B) Post-termination reimbursement. A participant who
ceases contributing to a health care reimbursement or limited purpose
health care reimbursement account during plan year 2020 or 2021 may
continue to receive reimbursement from any unused amount through the
end of the plan year in which participation ended, including any grace
period or extended grace period.
(C) Prospective mid-year election changes. During calendar
year 2020 and through plan year 2021, a participant may increase or
decrease contributions or end enrollment for a health care reimbursement
account or a limited purpose health care reimbursement account without
a qualifying life event. A participant may not reduce contributions
to an amount less than the total of:
(i) the amount of payroll distributions in the account,
if any; and
(ii) the amount of reimbursement the participant has
received, if any.
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