How much can employees contribute to an FSA?
Currently employers set the contribution amounts and there is no federally imposed limit. The rules are changing under healthcare reform. Effective 2013, the legislation limits contributions to no more than $2,500 annually for Healthcare FSAs. The limit is indexed to inflation for future years. Healthcare reform legislation did not specifically address changes to Dependent Care FSAs. Under current regulations, the IRS limits the maximum annual amount you can deposit in your Dependent Care account to $5,000, or $2,500 if you are married and filing separately. The IRS imposes additional restrictions based on marital status, tax-filing status, and spousal income and work status. See your tax advisor for details.
