The FSA contribution limit for 2024 is $3,200, an increase of $550 from the 2023 limit.
Contributions to FSAs are not subject to federal income tax, Social Security tax, or Medicare tax.
The maximum FSA contribution is determined by the IRS and is annually indexed to inflation.
The FSA maximum contribution is the maximum amount of employee salary reductions per FSA, not the total amount an employer can contribute.
Employers may choose to limit FSA contributions to levels below the IRS maximum.
Unused funds in an FSA at the end of the plan year or grace period are forfeited.
FSA funds can be used for medical, dental, and vision care expenses.
HSAs have separate contribution limits: $4,150 for individuals and $8,300 for families in 2024.
If both spouses have access to an FSA, each can contribute up to the maximum amount.
FSAs are employer-based accounts, and eligibility may depend on employer rules.
FSAs operate on a use-it-or-lose-it basis, so it's essential to estimate healthcare expenses carefully.
FSA funds can be used for eligible expenses for yourself, spouse, and dependents.
Over-the-counter medications are eligible FSA expenses without a prescription as of 2020.
An FSA calculator can help determine the optimal amount to contribute based on income and expenses.
FSAs can be used for approved medical equipment, such as blood sugar test kits and hearing aids.
Depending on the FSA, some funds can be used for childcare or transportation to medical appointments.
FSA funds can cover copayments, deductibles, and coinsurance costs.
FSAs may require enrollment during specific open enrollment periods or after a qualified life event.
FSA accounts can provide significant tax savings, particularly for those with recurring medical expenses.
Some employers offer a grace period for using FSA funds, typically 2.5 months after the plan year ends.