FSA Accounts - Maximum Contributions

Gomez

Does anyone know if the IRS has changed the maximum contribution amounts for health care FSAs or dependent care care FSAs for 2002?

Thanks!

RF

Gomez

In case anyone else has the same question, I received an answer from SHRM:

The maximum amount of expenses that an employee may be reimbursed
for under a dependent care FSA is $5,000 annually ($2,500 for a married
taxpayer filing separately). The IRS sets the limit for dependent care.

There is no statutory limit on the amount of reimbursement employees
may receive under a medical expense FSA. However, employers usually set a
maximum limit- e.g., $3,000-to protect themselves under the "risk of loss"
rule, which requires that employers make the full amount of coverage elected
available to employees from the first day of the plan year, regardless of
how much salary they have contributed to the account.

Scott Ruth

The new tax act (EGTRRA) did not raise the DCRA limits. It did raise the dependent care tax credit beginning in 2003. Both the percentage of expenses limitation (a maximum of 35% dependung on income) and the dollar limitation ($3,000 for one individual and $6,000 for two) were raised. The dollar limits are reduced by amounts contributed to a DCRA.