Section 125 News
125 News focuses
on two areas. First, we have set up
several links to IRS information on Flexible Benefits Programs.
These include information on medical/dental/vision expenses; dependent
care expenses; a segment devoted to “Frequently Asked Questions”; and
information on Transportation Reimbursement Expenses.
links are included when any recent, newsworthy information about Section 125
programs, COBRA or Section 132 Programs develops.
BEST PLACE TO BEGIN ANY INFORMATIONAL SEARCH FOR IRC INFORMATION IS IRS.GOV
IRS FORMS AND PUBLICATIONS LINKS
provides extensive answers to many of the most commonly asked Flexible Benefit
Questions by employers and plan participants.
The topics listed range from “Accident and Health Plans” to
(MEDICAL AND DENTAL EXPENSES)
and accompanying narrative about some of the most common medical and dental
reimbursable expenses via a Flexible Benefits Program.
The publication also lists examples of expenses not allowable for
reimbursement. The discussion
begins on Page 4 of Publication 502.
AND DEPENDENT CARE EXPENSES)
compares the tax savings using the dependent care tax credit vs. a Flexible
Spending Account. The discussion on “Employer-Provided Dependent Care
Benefits,” (i.e., Dependent Care FSA’s) begins on Page 12 of Publication
you open a Child Care Dependent Day Care Flexible Spending Account, you are
required to complete IRS FORM
2441 and attach it to your federal tax return.
Directions for completion of the form are found in INSTRUCTIONS
FOR FORM 2441.
need to complete FORM
W-10 (Dependent Care Provider’s Identification
Certification) if you participate in the Dependent Day Care FSA program.
Attach the completed W-10 to a copy of your 1040 return.
The W-10 Form does not need to
be sent to the IRS, only kept as part of your permanent tax return records.
SECTION 125 UPDATES
IRS SUSPENDS 5500 FILING
2002, the IRS suspended filing of Form 5500 for Cafeteria Plan Sponsors, pending
evaluation “whether this method of reporting the information required by
section 6039D is appropriate.” NEWS
RELEASE 2002-43 announces the suspension of the 5500 filing, while NOTICE
2002-24 outlines the details the specifics of the ruling.
some cases, we still recommend filing of the 5500, but for the majority of plan
sponsors filing will not be necessary until further guidance by the IRS.
Contact us at firstname.lastname@example.org
if you have any additional questions on
IRS APPROVES OVER THE COUNTER (OTC)
In September 2003, the IRS approved reimbursements for purchase of over the counter drug items. Eligible for reimbursement are purchases
of such OTC drugs as antacids, allergy medicines, pain relievers, and cold medicines. Vitamins and other related purchases
"for the general well being of the individual" are not eligible for reimbursement.
NEWS RELEASE 2003-108 announces the approval of reimbursement of OTC drugs in a FSA program,
REVENUE RULING 2003-102 details the specifics of the ruling.