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glass_joe
New Member

2021 FSA Contribution Limits - Married Filing Separately

I know this question has been asked in the forum before, but the answer detoured into "why are you filing married filing separately?" and a discussion about student loans. Hoping to get a clear response on the limits. If I sign up for an FSA at work to cover daycare expenses, how much can I contribute in 2021? I'm married filing separately, but my wife won't be contributing to an FSA through her employer. Can I contribute the full $10,500 or only $5,250? I understand a $5,250 limit per spouse if married filing separately, but would that still apply if my spouse doesn't contribute?

1 Best answer

Accepted Solutions
Opus 17
Level 15

2021 FSA Contribution Limits - Married Filing Separately

Yes, the $5250 limit still applies.

To be specific, you can have the plan trustee withhold the full $10,500.  However, when you file your MFS return, the maximum you can exclude from income is $5250, and the overage will be added back to your taxable income (there is no additional penalty).

 

This means that if you think you might decide to file jointly, I would take the full amount allowed (but not more than the cost of care, of course) because if you do file jointly, you get the full benefit, and if you file MFS, you won't be any worse off than if you had just taken the lower limit.  If you are sure you will file MFS, there's no point in taking more than $5250. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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2 Replies
Opus 17
Level 15

2021 FSA Contribution Limits - Married Filing Separately

Yes, the $5250 limit still applies.

To be specific, you can have the plan trustee withhold the full $10,500.  However, when you file your MFS return, the maximum you can exclude from income is $5250, and the overage will be added back to your taxable income (there is no additional penalty).

 

This means that if you think you might decide to file jointly, I would take the full amount allowed (but not more than the cost of care, of course) because if you do file jointly, you get the full benefit, and if you file MFS, you won't be any worse off than if you had just taken the lower limit.  If you are sure you will file MFS, there's no point in taking more than $5250. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

glass_joe
New Member

2021 FSA Contribution Limits - Married Filing Separately

Thank you, Opus 17, for your quick reply!

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