HR Fast Facts: Limits on Employer Contributions to Dependent Care FSAs

Learn about dependent care FSA employer contribution rules here.

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HR 101: The ABCs of FSAs

Employers can choose to contribute to employees’ Dependent Care Flexible Spending Accounts (FSAs). However, the combined employer and employee contributions cannot exceed the IRS limits (the maximum annual amount is $5,000 per year, or $2,500 if you are married and file separate returns). For example, if an employer has elected a $2,000 contribution to a Dependent Care FSA, employees may only contribute up to an additional $3,000.

  • Employer contributions to Dependent Care FSAs are not a matchEmployees will receive the full contribution amount regardless of what their election is, even if they elect $0.
  • As with Medical FSAs, employer contribution amounts for Dependent Care FSAs are set during company plan enrollment, and cannot be changed until the end of the plan year.
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