year may allow either a rollover or a grace period for unused amounts for the same plan year but not both. Carryovers only apply for qualifying medical expenses; plans may not allow participants to carry over unused amounts for dependent care or other expenses. The carryover amount does not reduce the participant's maximum FSA contribution for the next plan year. Accordingly, a person who carries over $550 to the next plan year and who also contributes $2,500 to their FSA for that plan year may be able to receive reimbursements from his or her FSA for up to $3,050 of eligible medical expense during that plan year. In order for an individual to be able to carry over unused amounts, the plan must be amended to permit this type of a carryover. California notice Employers in California that sponsor flexible spending accounts must notify participants of any "deadline to withdraw funds before the end of the plan year." The notice must be sent to all participants who work in California. Employers must provide the required notice in at least two methods (email, telephone, text message, postal mail, and in-person), only one of which may be electronic. The law is effective for plan years beginning on or after January 1, 2020. History Section 134 of the Revenue Act of 1978 gave tax-favorable treatment to flexible spending accounts for medical expenses. In 1984, the Internal Revenue Service issued a ruling that, while flexible spending accounts were allowable, employees must elect a certain amount for the plan each year and that any unused amounts would be forfeited at the end of the year. Until that point, some employers had set up flexible spending account plans that allowed employees to simply request reimbursement of any qualifying medical expense with no preset annual limit and no risk of forfeiture by employees. In 1997 and 1998, the Internal Revenue Service detailed circumstances when an employee could make changes to an annual election in a flexible spending account. Eligible events that would allow a change in annual election include a change in marital status, a change in the number of dependents, a change in a spouse's or dependent's employment status, a strike or a lockout, a leave of absence under the Family and Medical Leave Act, a change employment status (same as above), a change in a dependent's eligibility status, a significant change in the costs for