An appeals court threw out the three charges against Clash, 53, saying the claims were made outside New York's statute of limitations.
Clash was charged with sexual abuse by three men who said he molested them when they were minors, more than 10 years ago. But New York law states that a lawsuit must be filed within six years of the alleged event, or three years after a plaintiff turns 21, THR reports.
Clash was the voice of Elmo for 28 years until he resigned from Sesame Workshop in 2012, once the allegations against him became public.
Clash has denied the charges and says the relationships he was involved in were consensual.
In July 2013, a judge dismissed the charges against Clash, and the appeals court upheld that decision this month.