Because lifestyle spending accounts are post-tax accounts, the IRS does not mandate eligible expenses; rather, the employer decides what they'd like to cover for employees.
Lifestyle spending accounts have been around for years, but have gained traction in recent weeks as a result of COVID-19's impact on business. These accounts provide a way for employers to assist employees with unexpected expenses during an emergency or change in their routines.
In this Q&A-style post, we'll give you a baseline overview of these accounts, how they work, how employees use them, and why they can be a helpful resource to employees in times of need.
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