Benefits > Flexible Spending Accounts

FSA IRS Rules and Regulations

In exchange for the tax advantages available when you use the Health Care and/or Dependent Care Spending Accounts, the IRS has some special rules. The money in your Health Care Spending Account must remain separate from your Dependent Care Spending Account. This means that you may not use dollars from your Health Care Spending Account to pay for dependent care expenses, or dollars in your Dependent Care Spending Account to pay for health care expenses. The money in flexible spending accounts cannot be held in interest-bearing accounts by the employer or TPA. The annual maximum reimbursement for DCSA is $5000 per family. Expenses you have reimbursed from a Flexible Spending Account may not also be deducted on your federal income tax return. According to IRS regulations, any amount not used for covered expenses is forfeited. However, reimbursement requests for expenses incurred between January 1 and December 31 of the previous year may be submitted until the last working day as defined by the employer. You may begin, stop or change the amount of your spending account contributions only at annual open enrollment unless you have an appropriate life event change, such as: Marriage or Divorce Birth, adoption or legal guardianship of your child Death of a Spouse or Dependent Change in your employment status Change in your spouse's coverage or job Unpaid leave of absence Change in Day Care Provider - Resulting in significant changes in cost Dependent care expenses must be incurred because you are working. Expenses are subject to verification by written receipt. Your dependent care provider cannot be your tax dependent. If expenses are for child care, the child must be younger than age 13 unless disabled.