FSA Accounts - Maximum Contributions

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• 2 Comments sorted by Votes Date Added
• Gomez 11 Posts

  October 2001 PMVote Up0Vote Down

  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.
  
  
  
  

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• Scott Ruth 65 Posts

  October 2001 PMVote Up0Vote Down

  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.
  
  
  

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