Thanks DMarkM1 for your reply.
Unless I misunderstood what you wrote, it seems you didn't get my point: at no time is it question that we contribute more than what the IRS allows. The new law allows for a cap of $10,500 for s married couple filing jointly, and we intend to contribute $10,000 jointly, below the cap set forth by the law.
We are just circumventing the fact that an Employer may elect not implement, via their payroll/FSA accounts systems the ability to contribute more this year (even though it is allowed by law) – for practical reasons as simple as IT systems or reasons making it too complicated to implement that in the middle of the year.
If I was the only one working, and because my Employer elected not to implement the new cap, I would be stuck with contributing only $5,000 pretax to the FSA Dependent Care account (my company will assume I contribute for both of us).
It just happens that my husband also works, and even if his company also elects not to implement that new cap, he can still contribute up to $5,000 as well (his company will assume that he contributes $5,000 for both of us).
Together, at the end of the year when we do our taxes for 2021, we will have contributed a total of $10,000 together, which is below the $10,500 set by the law, despite both our Employers electing not to implement the new cap for convenience reasons.
The IRS does not, and certainly will not check with each Employer whether they have implemented in their systems the new cap allowing their employees to contribute more. The IRS will just enshrine in the 2021 tax rules the new limit of $10,500, and so will Turbotax for the calculations. The fact that for couples with both spouses working can resort to that trick will not result in anything illegal.
