SURENCY ADVANTAGEPLUS is now SURENCY FLEX
Closing of a Plan Year is a final review of the reimbursement accounts for all repayments throughout the Plan Year.
The IRS requires employers to report and take additional action when participants have taxable items. Therefore, in order to comply with the IRS regulations, it is important that Surency assist with the closing of your Plan Year to provide necessary reporting.
Taxable items are pending repayments from the Plan Year. Pending repayments could be a result of a debit card transaction where the participant did not provide a receipt (claim substantiation) or the transaction was determined to be an ineligible expense.
Surency will provide you with an updated Account Balance Detail Report for the previous Plan Year and a full accounting of open, unresolved repayments (taxable items).
The updated Account Balance Detail report will be provided 185 days after the closing of the Plan Year. The Account Balance Detail Report will be generated the 2nd day of the month following the 180 day mark.
When the Plan Year ends, which is the final filing date for the Plan Year, you need to follow these two steps:
- First, if allowed by law, withhold the amount of the improper charge from the employee's pay or other compensation.
- For terminated employees or where you cannot withhold from pay, you can report the unsubstantiated claims as income on the employee's W-2. (Amended W-2s are not required as "improper payment is reportable in the taxable year of the employee in which the indebtedness is forgiven.")
If you are using the Form 1099 method, you will need to change to the Form W-2 method.