On April 15, the UCPath Center sent out the following notice to 282 UCLA Campus employees and 42 UCLA Medical Center employees regarding a change to their 2021 contribution to the University of California Dependent Care Flexible Spending Account (DepCare FSA).
This is a follow-up to the email and letter we sent you last month regarding a change to your 2021 contribution to the University of California Dependent Care Flexible Spending Account (DepCare FSA). As we informed you, the amount of your 2021 DepCare contribution that is considered non-taxable has been reduced to comply with IRS requirements.
What happens next
The University must assess federal and state income taxes on the post-tax amount of your DepCare FSA contribution, known as the “impermissible benefit” amount. Federal and state income taxes on the impermissible benefit amount will be withheld from your April paycheck, and your net pay may be reduced.
If you have a balance in your 2021 DepCare plan account, you may be eligible for a refund. Contributions to your 2021 DepCare plan account in excess of the adjusted pre-tax amount, for which you have not yet been reimbursed for claims, will be refunded to you. The refund will be reduced by applicable payroll taxes and the federal and state income taxes on the impermissible benefit amount (as noted above).
You will not receive a refund if:
·You have no remaining balance in your 2021 DepCare FSA
·You have received claim reimbursements greater than the adjusted taxable amount of your contribution, or
·Taxes on the impermissible benefit amount exceed the potential refund
If you are paid monthly, you will see the adjustments described above (including any refund due to you) on your April 29, 2022, paycheck. If you are paid biweekly, you will see the adjustments on your April 27, 2022, paycheck.
Questions?
If you have questions, please contact UCPath at (855) 982-7284, Monday - Friday from 8:00 a.m. - 5:00 p.m. PST and select the following options:
- Select “1” at the main menu for current and former UC Employees
- Enter the last 4 digits of your Social Security number and your date of birth to authenticate
- Select “5” at the user menu
You may also log in to UCPath and click on “Ask UCPath” to submit an inquiry. Please select the following options when creating your inquiry:
- Subject: Type “DepCare FSA NDT”
- Topic: Select “Benefits”
- Category: Select “Flexible Spending Accounts (FSA)/Health Savings Account (HSA)”
We recognize that the financial consequences of these adjustments may be significant, and we sincerely apologize for the impact of this situation. We hope that we may continue to offer the tax advantages of the DepCare FSA plan to all eligible employees, and we are taking the necessary actions to ensure that IRS non-discrimination requirements are addressed in a timely manner going forward.
Thank you,
UCPath
(855) 982-7284
Monday - Friday from 8:00 a.m. - 5:00 p.m.
