FSAFEDS: Heroes Earnings Assistance and Relief Tax Act
(HEART Act)
December 24, 2008
Effective January 1, 2009, certain reservists who are enrolled in a health-care flexible spending account (FSA) will have an opportunity to apply for a taxable refund of their unused health-care FSA account balance. This is also known as qualified reservist distribution (QRD).
To be eligible for this refund, you must meet all of the following criteria:
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- Be enrolled in an FSAFEDS health-care flexible spending account,
- Be a member of the Army National Guard, Air National Guard, Army Reserve, Navy Reserve, Marine Corps Reserve, Air Force Reserve, Coast Guard Reserve or Reserve Corps of the Public Health Service, and
- Called to active duty for a period of 180 days or more, or for an indefinite period of time.
Listed below are further facts about the QRD refund:
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- A QRD refunds the balance of FSAFEDS allotments in the requestor’s health-care FSA as of the date of the request.
- The return of funds is taxable income in the year in which it is received.
- Receipt of a QRD closes the FSAFEDS health-care account for that benefit period.
- When a QRD is received no additional claims can be made against your health-care FSA for that benefit period.
Time Limit to Request a QRD:
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- A valid QRD can be requested during the period beginning with the date of the order or call to active duty and ending on the last day of the grace period for the FSAFEDS benefit period during which the order or call to active duty occurs.
- QRD requests will not be accepted before January 1, 2009, although the order or call to active duty can date back to June 18, 2008 (and possibly, before if the period of active duty continues after June 18, 2008).
How to Request a QRD:
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- Call FSAFEDS toll free at 1-877-372-3337 Monday through Friday from 9 a.m. to 9 p.m., EST, during the time period permitted for the request.
- Submit a copy of your orders or call to active duty to FSAFEDS.
Further detailed information and FAQs about QRDs will soon be available on the FSA Web site at www.fsafeds. com.