If you allow employees to pay for health- and dependent-care expenses through a tax-advantaged flexible spending account (FSA), you can now give them an extra 21/2 months to spend the money.
Under current "use it or lose it" rules, employees must forfeit any dollars set aside in their FSAs if they don't spend the money on eligible expenses by the end of the plan year. A new Treasury Department ruling gives employers the option of amending their cafeteria plans to allow employees to use this 21/2-month FSA-spending grace period. (Notice 2005-42)
Read the ruling at www.ustreas.gov /press/releases/js2456.htm.