Dependent Care FSA

Forum|Forum|6 years ago
October 29, 2019
2 replies
24 views

My wife and I file taxes jointly and we have one child. While the maximum allowed for dependent care FSA is $5,000, I qualify as a "highly compensated employee" and therefore my contribution limit is lower at $2,500. If my wife's company offers dependable care FSA and she can contribute $5,000, can we contribute and claim dependent care FSA through her so as to get the benefit of the full $5,000?

Expenses for day-care are invoiced in my name but paid through her checking account.

Critter

Level 15

If my wife's company offers dependable care FSA and she can contribute $5,000, can we contribute and claim dependent care FSA through her so as to get the benefit of the full $5,000? Yes you can.

Expenses for day-care are invoiced in my name but paid through her checking account. Doesn't matter since you are a married couple.

Separately, our day-care expenses are higher than the $5,000 threshold, can we also, therefore, claim childcare credit on the remainder of the expenses after claiming the first $5,000 through dependent care FSA? Since you have only one child the max the credit is on is $3000 so the FSA is used only ... there is nothing more for you to take the credit on.

Carl

Level 11

The maximum amount an employee can contribute to a dependent care FSA is set by the employer as long as it does not exceed the IRS maximum which is $5,000 a year for individuals or married couples filing jointly, or $2,500 for a married person filing separately. Married couples have a combined $5,000 limit, even if each has access to a separate FSA through his or her employer. The dependent care FSA maximum is set by statute and is not subject to inflation-related adjustments.

our day-care expenses are higher than the $5,000 threshold, can we also, therefore, claim childcare credit on the remainder of the expenses after claiming the first $5,000 through dependent care FSA?

No. That would be double-dipping.