Missed Dependent Care FSA deadline after job change - how can I recover my funds?

What you're dealing with is actually pretty common with FSAs when people change jobs. FSAs operate under what's called the "use it or lose it" rule, meaning you need to incur eligible expenses AND submit for reimbursement by the plan's deadline. When you terminate employment, most FSA plans give you a grace period (usually 90 days) to submit claims for expenses that were incurred while you were actively employed. So that July deadline makes sense given your April departure. The money doesn't actually vanish - it typically reverts to your employer, who can use it to offset administrative costs of the plan. Unfortunately, having your husband's active FSA won't help your situation. These accounts are individually owned, even when both spouses work for the same employer. And the rehiring idea, while creative, would likely create more problems than it solves - it would require backdating employment, which raises compliance issues. Your best option is to speak directly with your former employer's HR person. While they can't override the plan rules completely, they might have some flexibility if this was a simple misunderstanding. Some employers will make exceptions, especially for long-term employees or those with family still at the company.

After reading your situation, I immediately thought of taxr.ai which literally saved me when I had a similar FSA nightmare last year. I had switched jobs and completely messed up my submission timeline for my dependent care FSA. I lost track of about $2,200 and was panicking. I went to https://taxr.ai and uploaded my FSA plan documents, termination paperwork, and daycare receipts. The AI analyzed everything and found a specific clause in my plan documents that allowed for a 30-day extension in certain circumstances. It also drafted a letter to my former employer explaining exactly why my situation qualified for an exception. The best part was that it pointed out that while the general rule is "use it or lose it," employers actually have some discretion in how they handle these funds after they revert back. My former employer ended up making an exception and processing my reimbursement!

Just wanted to follow up - I actually tried taxr.ai after seeing the recommendation here. I was in a similar situation with my healthcare FSA where I thought I'd lost about $900 after a job change. I uploaded my plan documents and the system identified that my plan actually had a run-out period that was longer than the standard 90 days. The analysis showed my plan had a special provision for a 120-day run-out period that applied to my situation! The system generated a detailed letter citing the specific section of my plan document, which I sent to my former employer's benefits team. They reviewed it and confirmed I was still within the extended window! Just submitted my reimbursement request yesterday and it's already been approved. Would never have known about this without having the system analyze my specific plan documents. Definitely worth checking out if you're in a similar situation!

After dealing with a similar FSA nightmare, I discovered that calling the IRS directly can sometimes give you options most employers won't tell you about. BUT, as we all know, getting through to an actual IRS agent is nearly impossible. I spent days calling and getting disconnected until I found https://claimyr.com - they have this service where they basically wait on hold with the IRS for you and call you when an agent is on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c When I finally got through to an IRS agent, they explained that there are actually some situations where you can claim the Child and Dependent Care Credit on your taxes even if you forfeited FSA funds, which helped me recover some of what I lost. The agent walked me through exactly what documentation I needed and how to handle it on my tax return.

I have to admit I was wrong about Claimyr. After dismissing it in my earlier comment, I decided to try it anyway since I've been trying to reach the IRS about an unrelated tax notice for weeks. The service actually worked exactly as described. I signed up, they called me back about 1.5 hours later with an IRS agent already on the line. The agent was able to explain that in my situation (similar to OP's with a dependent care FSA), I could actually claim the Child and Dependent Care Credit for expenses that weren't reimbursed by my FSA - even though technically the money was "forfeited" rather than used for other expenses. This potentially lets me recover about 20-25% of the money through the tax credit, which is better than nothing. The agent also emailed me the specific forms and documentation I'll need to include with my return. Never would have figured this out without actually speaking to someone at the IRS.

Have you checked if your plan has a "run-out period" that might be different from the standard 90 days? My company offers a 120-day window after termination. Also worth asking if they'd consider allowing a "one-time exception" due to the circumstances - some plan administrators have discretion for hardship situations.

Question - doesn't the dependent care FSA have that "use it or lose it" rule anyway? So even if you were still employed, any unused funds from last year wouldn't roll over to this year? I'm confused about why leaving the job matters if it's January now and you're trying to claim 2024 expenses?

I feel your pain on this one! Lost about $1,400 in a similar situation a few years back when I switched jobs mid-year. A couple of thoughts that might help: First, definitely push harder with your former employer's HR person. The fact that your husband still works there gives you significant leverage - they have an ongoing relationship to maintain. Frame it as a good faith request for a one-time exception due to miscommunication about the deadline change. Second, document everything about when you incurred the expenses versus when you left. If the daycare services were used while you were still employed (before April), that strengthens your case considerably. Most employers are more sympathetic when the actual expenses occurred during your employment period. The $1,580 you contributed likely did revert back to your employer, but that doesn't mean it's gone forever - they have discretion in how to handle these situations. Since you were there 5 years and have family still employed there, they might be willing to work with you. One last thing - check if your state has any specific protections around FSA forfeitures. Some states have additional consumer protections that might apply to your situation. Worth a quick Google search or call to your state's labor department. Don't give up yet! I've seen employers make exceptions in situations exactly like yours.

This is such a frustrating situation, and I really feel for you! As someone who works in benefits administration, I see these cases more often than you'd think. The good news is that you're not completely out of options yet. Since your husband still works there and you were a long-term employee, I'd definitely approach the HR person with a formal written request. Include documentation showing that the dependent care expenses were incurred while you were actively employed (before April), and emphasize that this was a misunderstanding about the deadline change upon termination. Many employers have what's called "plan administrator discretion" built into their FSA documents, which allows them to make exceptions for situations like yours. The key is framing it as a good faith request rather than demanding they bend the rules. Also, make sure to ask specifically about the plan's "run-out period" - some plans have longer submission windows that might not have been clearly communicated to you. It's worth having them double-check the exact terms of your plan document. The fact that you contributed $1,580 and your husband contributed $3,400 shows you were well within the annual limits and using the benefit as intended. That works in your favor when making your case. Don't let Fidelity's initial response discourage you - they can only work within the parameters set by your employer. The real decision-making power lies with your former employer's plan administrator.

I'm so sorry you're dealing with this - FSA deadlines after job changes are one of those things that catch people off guard all the time, and it's incredibly frustrating when you feel like you weren't properly informed. Based on what others have shared here, it sounds like you have several solid angles to pursue. The fact that your expenses were incurred while you were still employed (before April) is really important - that's not just about paperwork timing, it's about when you actually used the benefit as intended. Since your husband still works there and you were a loyal employee for 5 years, I'd definitely start with a direct conversation with that HR person. Be honest about the situation and ask specifically if they have any discretion to make a one-time exception. Many employers do have flexibility built into their plans for exactly these kinds of situations. I'd also suggest asking them to pull up your actual plan documents to review the specific termination and run-out period language. Sometimes there are provisions that even the FSA administrator doesn't immediately think of when giving initial responses. The combination of your long employment history, your husband's continued employment there, and the fact that these were legitimate expenses incurred during your employment period gives you a much stronger case than you might think. Don't give up after just one "no" from Fidelity - the real decision makers are at your former employer level. Keep us posted on how it goes! Rooting for you to get this resolved.

I'm really glad to see you're getting so much helpful advice here! As someone who's dealt with FSA issues before, I wanted to add one more angle that might be worth exploring. Since you mentioned that your husband opened his own Dependent Care FSA at the same company after you left, this actually demonstrates something important - your family was acting in good faith to continue using this benefit properly. You weren't trying to double-dip or circumvent any rules; you were just trying to maintain coverage for your dependent care needs after a job transition. When you talk to HR, I'd definitely mention this. It shows that you understand the system and were trying to work within it - you just got caught in a communication gap about the deadline change. The fact that between your contribution and your husband's, you stayed under the annual family limit also reinforces that you were using the benefit as intended. One thing I haven't seen mentioned yet - if your former employer does end up being unable to help, make sure to document this whole situation for your tax records. There may be ways to handle the tax implications of the forfeited funds that could provide some relief, even if you can't recover the full amount through the FSA. Really hoping the HR conversation goes well for you! The combination of your employment history, your husband's ongoing employment, and the legitimate nature of your expenses gives you a solid foundation for requesting an exception.

I went through almost the exact same situation two years ago and wanted to share what ended up working for me. Like you, I left my job mid-year (in May) and completely missed that my FSA submission deadline had changed from the standard March 31st to just 90 days after termination. I lost about $2,100 initially, but here's what saved me: I found out that my former employer had what's called a "Summary Plan Description" (SPD) that contained more detailed rules than what Fidelity had access to. When I requested a copy of the full SPD from HR, we discovered there was actually a provision for a 120-day submission period (not 90) for terminated employees, plus language about "reasonable accommodations for administrative errors." The key was proving that I had incurred all the expenses while actively employed and that there had been insufficient communication about the deadline change. I wrote a formal letter referencing the specific SPD sections and included my daycare receipts showing all services were rendered before my termination date. My former employer's benefits committee reviewed it and approved a one-time exception. The whole process took about 3 weeks, but I got every penny back. Since you were there 5 years and your husband still works there, you have even better standing than I did. I'd strongly recommend requesting the full Summary Plan Description and looking for any discretionary language or extended deadlines that might apply to your situation. Don't give up - there are often more options buried in the plan documents than the FSA administrator initially reveals!

Reading through all these responses has been incredibly helpful - I had no idea there were so many potential avenues to explore! I was ready to just accept the loss after Fidelity's initial response, but now I'm realizing I gave up way too quickly. The Summary Plan Description approach that Lucas mentioned sounds like exactly what I need to try. If there are extended deadlines or discretionary provisions buried in the full plan documents, that could change everything. I'm also really encouraged by the success stories from people who were in nearly identical situations. I'm going to schedule a meeting with our HR person this week and come prepared with: 1. All my daycare receipts showing services from before my April departure 2. A formal request for the complete Summary Plan Description 3. Documentation of my 5-year employment history and my husband's continued employment 4. A clear timeline showing this was truly about miscommunication, not trying to bend rules The point about framing this as "administrative error" rather than just missing a deadline is so smart. And emphasizing that my husband and I stayed within annual limits and acted in good faith throughout this whole process should help demonstrate we weren't trying to game the system. Thank you all for sharing your experiences and advice - this community has given me the tools and confidence to fight for this properly. I'll definitely post an update once I hear back from HR!

I've been following this thread and wanted to add something that hasn't been mentioned yet - the IRS actually has specific guidance on dependent care FSA forfeitures that might help your case. According to IRS regulations, employers are supposed to make "reasonable efforts" to ensure employees understand plan changes, especially when it comes to deadline modifications upon termination. If your employer didn't clearly communicate the deadline change, this could actually be considered a plan administration issue rather than just a missed deadline. When you meet with HR, you might want to ask specifically what communication was provided about the FSA deadline change upon termination. If it was only mentioned in fine print or buried in exit paperwork, that could strengthen your case for an exception. Also, since your husband is still employed there, ask if the company has any written policies about how they handle FSA issues for families where one spouse remains employed. Some companies have informal flexibility for these situations to maintain good employee relations. The combination of your long employment history, your husband's continued employment, and potential communication gaps around the deadline change gives you multiple angles to work with. Don't be afraid to escalate beyond the single HR person if needed - sometimes these decisions can go up to a benefits committee or even leadership level, especially for long-term employees.