Dear Bogleheads,
Both my wife and I are working on enrolling in benefits for 2025, and we have a question about contribution limit for Dependent Care FSA:
According to my wife's employer, she is a higher-paid participant, and therefore her employer is limiting her contribution to Dependent Care FSA to $1,500 in 2025. The benefit brochure says that:
The IRS requires an annual nondiscrimination test to make sure higher-paid participants do not disproportionately benefit from the FSAs. If the plan fails that test, we must take corrective action. For this reason, annual child/adult care FSA contributions for employees earning $150,000 or more a year will be limited to $1,500.
However, I found from the Internet that the annual contribution limit is $5,000 per household, and I couldn't find any IRS webpage suggesting a different limit for higher-paid participants. My employer is not limiting my contribution to Dependent Care FSA. As such, would it be OK for my wife to contribute $1,500, and for me to contribute $3,500?
Thanks a lot, and please do not hesitate to let me know if I could provide any additional information.
Both my wife and I are working on enrolling in benefits for 2025, and we have a question about contribution limit for Dependent Care FSA:
According to my wife's employer, she is a higher-paid participant, and therefore her employer is limiting her contribution to Dependent Care FSA to $1,500 in 2025. The benefit brochure says that:
The IRS requires an annual nondiscrimination test to make sure higher-paid participants do not disproportionately benefit from the FSAs. If the plan fails that test, we must take corrective action. For this reason, annual child/adult care FSA contributions for employees earning $150,000 or more a year will be limited to $1,500.
However, I found from the Internet that the annual contribution limit is $5,000 per household, and I couldn't find any IRS webpage suggesting a different limit for higher-paid participants. My employer is not limiting my contribution to Dependent Care FSA. As such, would it be OK for my wife to contribute $1,500, and for me to contribute $3,500?
Thanks a lot, and please do not hesitate to let me know if I could provide any additional information.
Statistics: Posted by argees — Fri Oct 25, 2024 1:51 am — Replies 0 — Views 16