Question about FSA for childcare

[Sschendel1989]

Hi there,

My husband and I are married and file jointly. Last year our combined taxable income was $168,000. For next year, we will have one child and expect to spend $22,000 in childcare for daycare. We don't have a state income tax. We both make roughly the same amount of money. The only real difference is that I don't pay into social security (my husband does) because my government job has an MEBT that I can pay into instead. Both our employers offer a FSA for childcare.

My question is can we each put $5k toward a childcare FSA next year through our employers, or is it $5k combined for the two of us? If it is $5k total, is it advantageous for one of us to do it, or for us to split it and each put $2,500 toward our respective FSAs?

[conniem123]

For 2023 the contribution maximum to a dependent care flexile spending account remains at $5,000 per household.

The money you contribute to a Dependent Care FSA is not subject to payroll taxes, so you end up paying less in taxes and taking home more of your paycheck.  It would be best to have the individual with the higher income contribute to their FSA program.  

I hope you find this helpful!

[SuziM]

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