There are two types of Flexible Spending Accounts (FSAs)—Health Care and Dependent Care—and both offer a great way to save money by allowing you to contribute pre-tax dollars into an account (avoiding federal and state income tax, as well as FICA) that you can use to pay for eligible expenses. How much you save depends on how much you spend on health care and dependent care each year and on your tax bracket. But using an FSA to pay out-of-pocket costs on eligible expenses such as copays, deductibles and daycare related expenses, can save on your taxes each year.
The Health Care FSA can be used to pay for eligible health care expenses such as copays, deductibles, prescription drugs and over-the-counter medications (with a prescription), dental exams and treatment, eyeglasses, contact lenses and sunglasses (with a prescription). You can use your Health Care FSA to pay for health care expenses for your family members, too–whether or not they are covered by your health insurance–as long as they are your tax dependent.
If you have to pay for daycare and related expenses for a dependent child or adult so that you and your spouse/domestic partner can work or attend school, you can use a Dependent Care FSA.
The maximum amount you can contribute to a Health Care FSA is $2,750 in 2020. In addition, you may roll over up to $500 of unused funds in your Health Care FSA. This is a great feature. It means that you are less likely to forfeit unused funds at year’s end, or be forced to “spend down” your account on non-essentials. And, you do not have to try to precisely predict out-of-pocket medical expenses a whole year in advance. The $500 rollover does not count toward the annual maximum contribution amount. You will still want to think carefully about how much you contribute to a Health Care FSA. While you can roll over up to $500 of unused funds, you will lose any amount over $500 not incurred by Dec. 31 if you don’t claim it by the filing deadline of Apr. 30 of the following plan year.
The maximum amount you can contribute to a Dependent Care FSA is $5,000–per household. You will want to be even more careful about deciding how much to set aside in a Dependent Care FSA, because no rollover is permitted if you don’t claim all your funds by the filing deadline of Apr. 30 of the following plan year.
You can make your elections during new hire, a qualified family status change, or during Open Enrollment each year. It is important to estimate your expenses carefully before making your elections.
Contact WageWorks at 877.924.3967 or HR Shared Services at 315.443.4042.
Types of Flexible Spending Accounts
- All About Health Care FSAs
- All About Dependent Care FSAs
- Searchable List of Eligible Health Care Expenses
- Searchable List of Eligible Dependent Care Expenses
Interactive FSA Tax Savings Calculators
Important FSA Forms
- Letter of Medical Necessity [PDF]
- Health Care FSA, Paper Claim Form [PDF]
- Dependent Care FSA, Paper Claim Form [PDF]
Every effort has been made to ensure that the information contained within this website is accurate. However, benefits are governed by legal documents (which, in certain circumstances, may include insurance contracts). If there is any difference between the information in this website and the official documents, the official documents will control. As is the case with all of Syracuse University’s employee benefit plans, the University reserves the right to modify or terminate these benefits at any time.