Flexible Spending Accounts (FSA) are available for health and dependent day care. These accounts offer you a tax-free way to pay for qualified expenses not covered by insurance. The amount you elect to place in your account is deducted from gross earnings before federal and state taxes are calculated, which reduces your taxable income and saves you money.
Each calendar year, you decide how much money to set aside for your FSA(s). In 2021, you may set aside up to $2,750 for your health care spending account and up to $5,000 for dependent day care. The amount you elect to place in your FSA(s) will be deducted over 24 pay periods during the year. You must re-enroll each year to participate in this benefit.
You have until March 15th of the following plan year to file claims for reimbursement. It is important to carefully choose the amount for each account as you can only roll over $500 for unused healthcare expense to the following plan year.