The Forma Pre-tax Card is a convenient way to pay for pre-tax expenses without having to pay out-of-pocket and wait to be reimbursed. Your Pre-tax Card can only be used for services that have already been rendered. Prepayments are not eligible under IRS regulations.
For example, let’s say you pay for next month’s daycare expenses in advance. Because the service has not yet been provided, this payment would be considered a prepayment and therefore ineligible for reimbursement until the services occurred.
What happens if I accidentally make a prepayment with my card?
If this happens and the transaction goes through the adjudication process, you will be asked to provide further documentation such as an invoice or proof of payment.
These documents will indicate that the service you paid for has not yet been rendered and will be marked as ineligible and the transaction will be rejected. A “balance due” will then be created equal to the rejected transaction amount, and your Pre-tax Forma Card will temporarily be blocked from spending from that pre-tax benefit. The amount you owe will automatically be subtracted from your next reimbursed claims until the entire amount is offset. Then your card will be reactivated.
To avoid having your Pre-tax Forma Card temporarily blocked, we recommend that you pay for prepayment expenses out-of-pocket and file a reimbursement claim after the service has been provided.