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About Arthur Naman
Expertise
General accounting and bookkeeping questions. How to do monthly bookkeeping, how to prepare financial reports. How to reconcile accounts.

I cannot answer questions pertaining to pension or retirement planning.

This is not a forum to have homework answered. Please do your own homework.

Experience
30 years' experience doing tax and accounting work

Education/Credentials
MPA from Univ. of Texas at Austin, MBA Golden Gate Univ, San Francisco CA

You are here: Experts > People/Relationships > Retirement Planning > Accounting, Payroll & Pension Issues > Flexible Spending Account Refund

Accounting, Payroll & Pension Issues - Flexible Spending Account Refund

Expert: Arthur Naman - 6/17/2009

Question
We received our refund for unused FSA funds for 2008. It is larger than was estimated and is being carried in a receivables account. Is the difference all classified as other income. Can a portion offset admin expenses even though they are for 2008 and the remainder be a net gain?

How should we handle this refund?

Thank you.
Cindy

Answer
I am a little unclear as to whether you are an employer or employee based on the wording of your question.

Normally the unused portion in an FAX account at the end of the year is not returned to the employee pursuant to a "use it or leave it" rule. The funds remain in the FSA plan.

Please check with your plan administrator or CPA regarding this.

I am guessing that the excess funds are available for admin expenses.

If you are an employee, then normally you would not be eligible to receive returns.

Does this all make sense??

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