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.
Maureen Ezekwugo is the Chief Executive Officer of Oggvo, a technology company that is on a mission to help level the playing field between small businesses and big companies that have access to more resources for brand awareness and growth. With more than 20 years of experience, Maureen's career has been dedicated to helping businesses thrive online with products that transform how they market themselves to stand out and connect with today's modern online consumer. As CEO, Maureen is responsible for strategy, culture, vision, growth, and shareholder value at Oggvo.
Maureen has deep experience in driving revenue growth, building high-performing teams, and delivering exceptional customer value in competitive business markets, having served most recently as Chief Customer Officer at RealSelf – the leading online destination for consumers shopping in the aesthetic medicine space - where she led revenue growth, customer operations, and B2B marketing. Maureen is proud of her work with companies in the startup and hyper-growth stages including businesses such as MarketLeader, a software company in the real estate industry, where she helped build a powerful sales force that increased annual revenues from $1M to $100M throughout her leadership tenure.
Maureen also serves as a board member of Ada Developers Academy and as an advisor to multiple startups including BeautyTap and JoyMD. She regularly volunteers with organizations such as the Big Brother Big Sisters of America and enjoys spending her free time traveling, connecting with friends, and relaxing with her family and her cat Sochi.
Tim Hardcastle, CEO and co-founder of Instanda is a highly experienced Board level CIO/COO in FTSE 100 and 250 businesses. His experience managing and leading technology-enabled business change and his determination to consistently exceed outcome expectations led him to lead the development of the entirely new business and service model that is INSTANDA.
Patrick Münch is chief information security officer of Mondoo, a cybersecurity company.
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.
