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Dependent Day Care Flexible Spending--State Escheat Laws


Guest JWB19
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Does anyone have any thoughts on how to handle uncashed checks from a dependent day care flexible spending account? Specifically, I am wondering whether those funds escheat to the state, and if so, which state's law will apply (the state where the account is located, the state of the payee, the state of incorporation of the payor, the principal place of business of the payor all seem like possibilities).

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Does anyone have any thoughts on how to handle uncashed checks from a dependent day care flexible spending account? Specifically, I am wondering whether those funds escheat to the state, and if so, which state's law will apply (the state where the account is located, the state of the payee, the state of incorporation of the payor, the principal place of business of the payor all seem like possibilities).

Does your plan document address this ? Ours states that they are forfeitures

Q-26. What happens to unclaimed reimbursements?

Any reimbursements that are unclaimed (e.g., un-cashed benefit checks) by the close of the Plan Year following the Plan Year in which the Eligible Expense was incurred shall be forfeited.

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  • 1 year later...

Participant receives FSA reimbursement check in 2007. He loses it and finds it in 2011 and wants a new check. Plan has the forfeiture language spelled out above. Nonetheless, the Company wants to cut the guy another check. That would be taxable income, correct?

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