A Flexible Spending Plan is an employer-sponsored benefit plan. When you enroll in a Flexible Spending Plan, you can set aside a portion of your salary, on a tax-free basis, to use to pay for certain Eligible Expenses. The money that you set aside through regular payroll deductions is not subject to Federal, state (most states) or social security taxes. There are two types of Flexible Spending Accounts (“FSA”): Healthcare and Dependent Care.
If your employer sponsors a Flexible Spending Plan, please see our FAQ section to learn more. Please remember, the information we provide is general. Consult your employer’s plan for a more specific description of the FSA plan. Before you enroll, read your enrollment material and the Plan Summary, and ask questions if you have a particular concern.
Frequently Asked Questions
ALWAYS DISCUSS THESE ISSUES WITH YOUR TAX ADVISOR. You can also review IRS publication 503 for more information.