The IRS sets Flexible Spending Account (FSA) contribution limits, and they typically rise from year to year to reflect cost-of-living adjustments. FSA funds can be used to pay for qualified medical expenses and reduce your out-of-pocket expenses during the plan year. To effectively leverage this account, you should estimate your projected medical expenses for the coming year.
FSA funds are subject to a "use it or lose it" rule with limited exceptions. See Grace Periods and Carryovers.
When you enroll in an FSA at the beginning of your employer's plan year, you will need to "elect" how much to contribute to your FSA. Your entire annual FSA election amount is available on day one of your plan (even if you haven't yet contributed the full amount to the account).
| 2022 Maximum Election | 2021 Maximum Election | |
| Health FSA (also called a "general purpose" FSA) | $2,850 | $2,750 |
| Limited Purpose FSA (pairs with an HSA for dental & vision only) | $2,850 | $2,750 |
| Dependent Care FSA (child & elder care) | $2,500 if you file taxes as married and filing separately. $5,000 if you file as married and filing jointly, or file as single/head of household (HOH). IRS Requirements: When filing jointly, both spouses must have W-2 earned income during the year. Unlike other FSAs, Dependent Care FSA contribution limits always align to the calendar tax year (which may or may not align with your plan year). | $2,500 if you file taxes as married and filing separately. $5,000 if you file as married and filing jointly, or file as single/head of household (HOH). IRS Requirements: When filing jointly, both spouses must have W-2 earned income during the year. Unlike other FSAs, Dependent Care FSA contribution limits always align to the calendar tax year (which may or may not align with your plan year). |
Can both spouses have a Health FSA?
If both spouses' employers offer a health flexible spending account, you can each contribute to your own Health FSA (2022 example: $2,850 per FSA for household maximum of $5,700).
Note that you cannot both submit the same expenses for reimbursement. This is known as "double-dipping."
Do I report my FSA on my income taxes?
No. Unlike a Health Savings Account (HSA), there are no reporting requirements for an FSA on your tax return.
References and Resources:
What is an FSA?
Dependent Care: FSA or Tax Credit?
HSA, FSA, HRA Comparison Table
IRS Publication 503: Child and Dependent Care Expenses
