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I have FSA Money that was not used. Can I claim this anywhere as a loss?

Forum|Forum|6 years ago
June 4, 2019
1 reply
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Best answer by TomD8

No, you can't. Since your FSA money was never taxed, you cannot deduct forfeited FSA funds. From the IRS perspective, you already received a tax break on that money because it was never taxed in the first place.

TomD8Answer

Employee

No, you can't. Since your FSA money was never taxed, you cannot deduct forfeited FSA funds. From the IRS perspective, you already received a tax break on that money because it was never taxed in the first place.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Initially the money was not taxed to you, this I agree with. This means that the money was subtracted on your W2, then if you did not use it, you are required to include it in income. This gives you basis, you are taxed on it and you can claim a capital loss in my opinion.

But once you don't use the FSA dollars, you are then required to declare it as income, and are then taxed on it. Surely you can then claim a capital loss?