Flexible Spending Account
Flexible Spending Accounts are reimbursement accounts that allow you to pay for certain eligible expenses with tax-free dollars. Through pre-tax salary reduction and reimbursement, you convert taxable income into non-taxable benefits. The result is reduced tax withholdings and more take-home pay.
Two types of FSA plans:
1. Medical FSA can be used to pay for eligible unreimbursed health care expenses (not covered or paid for by insurance) incurred by you, your spouse, and your dependents. Expenses that qualify for reimbursement include doctor visits, deductibles, copays, prescriptions, mental health care, dental & orthodontic services, chiropractor services, eye exams, glasses & contacts.
The annual maximum for 2026 is $3,400.
It’s important to estimate your out-of-pocket health care expenses for the upcoming year. At the end of the plan year, you will be allowed to rollover up to $680 to the following plan year. Any amount above $680 will be forfeited.
2. Dependent Care FSA can be used to pay for eligible dependent care expenses (daycare & childcare) so you and your spouse can work, look for work, or attend school full-time. Covered expenses must be for a qualified child who is a dependent (age 12 and under or person of any age whom you claim as a dependent on your taxes and who is mentally or physically incapable of caring for himself or herself and spends at least 8 hours a day in your household). Eligible expenses include childcare, before and after-school care and day camps.
The annual maximums for 2026 are:
- $7,500 (self/married)
- $3,750 (married but filing separately)
Claims must be filed by January 31st. Rollover does not apply