Flexible Spending Accounts (FSAs) are voluntary plans that enable active employees to save money by paying for certain health care and dependent care expenses using pre-tax pay. The Niagara Falls City School District oﬀers two special tax-savings accounts to eligible employees – Health Care FSA and Dependent Care FSA. Enrollment in FSA is not automatic. You must re-enroll each year during the Open Enrollment period. If you are not eligible for benefits, you cannot enroll in Flexible Spending Accounts.
We all have some expenses that qualify for an FSA, so why not take advantage of this IRS approved tax break? When you enroll, you decide how much of your pay to set aside in the Health Care FSA and/ or Dependent Care FSA. The money you elect to set aside is deducted throughout the year from your pay before Federal income, State income, and Social Security taxes are calculated. When you have an eligible expense, you pay for the expense and file for reimbursement from your FSA account. You are reimbursed with your own money from the appropriate account, and the money remains untaxed. In other words, you never pay taxes on the money that flows through your FSA(s). The District pays the full cost of administering these FSA accounts.
The FSAs are governed by IRS guidelines, so keep these important rules in mind as you plan your participation in these accounts:
• The FSA plan year runs from July 1st to June 30th. Under the Health Care or Dependent Care FSA, eligible expenses incurred during the year can be reimbursed. This means that you can incur expenses through June 30th and have 60 days from that date to submit for reimbursement. If you stop participating in the Health Care or Dependent Care FSA before June 30th, expenses incurred after the date participation stops are not eligible for reimbursement.
• “Use-It-or-Lose-It” Rule: Any money remaining in your FSA accounts after the 60 day extension period has ended (August 30th of the year following the current calendar year) will be forfeited. Estimate your future expenses carefully to protect yourself against forfeitures.
• The accounts are separate. Contributions made to the Health Care FSA cannot be transferred to the Dependent Care FSA or vice versa.
• Finally, you should be aware that your participation in the FSAs may slightly reduce your future Social Security benefits, because your FSA contributions reduce your taxable income.
**ALL FSA/HRA REIMBURESEMENTS MUST BE SUBMITTED TO M&T NO LATER THAN
60 DAYS AFTER THE BENEFIT YEAR ENDS OR YOU WILL LOSE IT**