The Internal Revenue Service issued guidance Tuesday to make temporary changes to section 125 cafeteria plans, with the goal of providing tax relief and flexibility in the midst of the novel coronavirus pandemic. The IRS is extending the claims period for health care flexible spending arrangements and dependent care assistance programs and enabling taxpayers to make mid-year changes to their accounts.
The guidance released Tuesday by the IRS deals with the unanticipated changes in expenses faced by many taxpayers as a result of the COVID-19 pandemic. The IRS is now allowing its previously provided temporary relief for high deductible health plans to be applied retroactively to Jan. 1, 2020, and also increases for inflation the $500 permitted carryover amount for health FSAs to $550.
Mr. Wilson joined the firm in 1999 and is a managing director responsible for the Liability Driven Investment business segment. His background includes structuring and managing complex asset/liability programs, utilizing multiple strategies in different currencies. During his career, he has developed innovative solutions for clients seeking to optimize their business profile, generate value, de-risk or manage liquidity. He possesses strong capabilities in treasury management, structuring and capital modeling, risk management and hedging. Mr. Wilson has a bachelor's degree in economics from the University of Albany and a master's degree in finance from Fordham University. He holds the designation of Chartered Financial Analyst (CFA) through the CFA Institute and is a member of the New York Society of Security Analysts.
Gary Hallgren is president at Arity, where he leads the development and implementation of Arity's strategy and operations.
Gary has extensive experience creating next-generation telematics solutions and Software as a Service (SaaS) business models, managing mergers and acquisitions of public and venture-backed companies and leveraging data and analytics to create breakthrough business opportunities.
Prior to joining Allstate in 2015, Gary served as senior vice president of Corporate Strategy at Telogis, where he negotiated four strategic acquisitions related to fleet management, insurance telematics, routing and logistics and commercial navigation. Previously, he was CEO of Remote Dynamics Inc., where he led a turnaround and positioned the company as a leading telematics supplier to the construction industry.
Earlier in his career, Gary served as president and CEO of WirelessCar North America, Inc., which provides telematics services to the fleet management industry and vehicle manufacturers. He also served as vice president of operations at Volvo Technology of America, which provides telematics solutions for cars, trucks and marine products.
In its 22nd year, the program is celebrating both veteran honorees achieving new levels of success and first-time honorees representing a fresh wave of leadership
In Notice 2020-29, the IRS is offering extra flexibility to taxpayers by:
- extending the claims periods for taxpayers to apply unused amounts remaining in a health FSA or dependent care assistance program for expenses incurred for those same qualified benefits through Dec. 31, 2020;
- expanding the ability of taxpayers to make mid-year elections for health coverage, health FSAs and dependent care assistance programs, allowing them to respond to changes in needs as a result of the COVID-19 pandemic; and
- applying earlier relief for high-deductible health plans to cover expenses related to COVID-19, and a temporary exemption for telehealth services retroactively to Jan. 1, 2020.
In conjunction with that notice, the IRS also issued Notice 2020-33, in response to the Trump administration’s Executive Order 13877, which directs the Treasury secretary to “issue guidance to increase the amount of funds that can carry over without penalty at the end of the year for flexible spending arrangements.” The notice ups the limit for unused health FSA carryover amounts from $500, to a maximum of $550, adjusted each year for inflation.
