You might recall that in December 2020, Congress passed the year-end funding bill known as the Consolidated Appropriations Act, 2021 (CAA), which contained provisions that provide significant flexibility for flexible spending accounts (FSAs) and dependent care assistance plans (DCAPs) in 2020 and 2021. Last week, on February 18, 2021, the IRS released Notice 2021-15 to clarify certain aspects of the CAA and to provide even more flexibility than that provided in the CAA. Here is a brief overview of both the CAA and Notice 2021-15:
IRS Notice 2021-15 restates and clarifies certain aspects of the CAA, and it also provides additional flexibility. The following outlines most, but not all, of the Notice 2021-15 guidance.