IRS Information Letter: Unused Transportation Benefits Ineligible to Transfer Into Health FSA (IRC §125)

Response to request asking to receive an IRS ruling to allow a transfer of remaining commuter benefit plan (CBP) amounts to a health flexible spending arrangement (FSA) under an I.R.C. §125 cafeteria plan where due to the pandemic not all of the benefits were used, the IRS released Apr. 6. Qualified transportation fringe benefits are not qualified benefits under a §125 cafeteria plan and are not part of an FSA, the IRS explained. While the Taxpayer Certainty and Disaster Relief Act allowed employers to offer employees the chance to change election amounts, there is no provision under the ...