Can I have FSA and Limited FSA at the same time?
Asked by: Edwina Bednar | Last update: November 28, 2025Score: 4.1/5 (40 votes)
Can you have an FSA and limited FSA?
By limiting health FSA reimbursements to dental and vision care expenses, you remain eligible to participate in both a limited-purpose health FSA and a HSA. Participating in both plans allows you to maximum your savings and tax benefits.
Can you have two FSA plans?
Does the IRS employee contribution limit of $2,500 for Healthcare Flexible Spending Account (FSA) apply to the family or can my family have more than one FSA? A. You can have more than one $2,500 Healthcare FSA. An employee of a specific (or related employer) can have just one FSA.
What happens if you put more than $5000 in dependent care FSA?
However, if you have more than $5,000 in dependent care expenses (effectively paid with after-tax dollars since you added it to your income), you may be able to use that additional amount to claim a dependent care tax credit on the Form 2441.
Is limited purpose FSA worth it?
Is a limited purpose FSA right for me? If your employer offers an LP-FSA, enrolling in one can be an excellent option if you're looking to reduce your dental and vision expenses while capitalizing on potential tax savings.
FSA vs. HSA: What is the Difference?
Does Limited-Purpose FSA cover Invisalign?
Invisalign orthodontics reimbursement is eligible with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA) or a limited-purpose flexible spending account (LPFSA).
Can I use limited FSA for sunglasses?
In most cases, non-prescription sunglasses are not eligible for payment with FSA funds. However, reading sunglasses like our SunReaders® are FSA-eligible because they help correct presbyopia. Reading glasses (without tinted lenses) are also FSA-eligible for this reason.
What are the drawbacks of dependent care FSA?
Drawbacks of Dependent Care FSA
If money is left over at the end of the year, it doesn't carry over to the next year. If your employer doesn't offer this account, there is no other way to get one. Your FSA can only pay for qualifying expenses, while you're working.
Can I pay a babysitter with dependent care FSA?
Yes, your dependent care FSA can reimburse you for expenses paid to a babysitter under the age of 19 as long as the babysitter is not you or your spouse's child, stepchild, foster child, or tax dependent.
Can you double dip on dependent care FSA?
you may not “double-dip”, which means that expenses reimbursed under your Dependent Care FSA may not be reimbursed under your spouse's Dependent Care FSA and vice versa.
What is double dipping FSA?
What is “double dipping”? Double dipping is paying for an expense on a tax-free basis and also being reimbursed (or receiving a tax deduction) for the same expense on a tax-free basis. This is forbidden by the IRS.
Can both spouses have limited FSA?
Yes, if your spouse is eligible to make contributions to a limited-purpose FSA. Each spouse may contribute up to the $2,600 maximum limit to their own health FSA. This applies even if both spouses participate in the same health FSA plan sponsored by the same employer.
Is an HSA or FSA better?
Bottom line: Both HSAs and FSAs provide financial benefits for managing health care expenses. HSAs offer more flexibility and long-term growth potential, making them a valuable tool for future financial planning. Learn about HSA options from Aetna.
Can you have two separate FSA accounts?
Both you and your spouse can each have your own Healthcare FSA through your respective employers and both contribute the maximum amount to each account. For example, if you each contribute the maximum of $2,850* to your Healthcare FSAs, you will have a total of $5,700 for your family.
What is the IRS rule for limited purpose FSA?
An LPFSA, like an FSA, is only available to you if your employer offers it; you can't open an account on your own. Under federal law, both also have an annual contribution limit of $3,200 in 2024, rising to $3,300 in 2025. 4 The contribution amount is usually increased each year to account for inflation.
How much limited FSA can I carry over?
You can contribute up to a maximum of $3,300.00 * to your Limited Expense Health Care FSA each year. Keep in mind, you may carry over up to $660.00 remaining in your account from one plan year to the next.
Can I use dependent care FSA for swimming lessons?
Lessons (music, dance, swimming, etc.) Not a qualifying expense But see Day camp. Long-term care expenses See Custodial care and Elder care. Nanny See Au pair.
What happens to unused FSA funds?
The IRS created the ""use or lose"" rule, which states that all money left in your FSA is forfeited after the benefit period ends . If you don't use all of your FSA funds during the benefit period, you risk losing money.
Can my mom get paid for watching my child?
Technically your mom or dad are independent contractors if they babysit at their house. But if someone babysits at yours, then they're considered a household employee, although you don't need to issue a W-2. You also don't need to withhold Medicare or social security (FICA) taxes—even if you pay them more than $2,400.
Is FSA for daycare worth it?
The main benefit of an FSA is that the money set aside in the account is in pretax dollars, thus reducing the amount of your income that is subject to taxes. For someone in the 24% federal tax bracket, this income reduction means saving $240 in federal taxes for every $1,000 spent on dependent care with an FSA.
What is the biggest disadvantage of the FSAs?
While FSAs offer several benefits, they also have limitations. The 'use-it-or-lose-it' rule can lead to the loss of unspent funds. Additionally, there are restrictions regarding eligible expenses and contribution limits, which are determined by the IRS and can change annually.
What happens if I put too much money in my dependent care FSA?
The excess amounts are merely converted to taxable income. The employee does not lose the excess contribution.
Are Apple watches FSA eligible?
Likely not. While your Apple Watch, Garmin, or other tracker may offer you some insight—and maybe even some encouragement—to stay on top of your fitness routine, they are not typically considered medical devices for purposes of FSA and HSA funds.
Is LASIK covered by Limited FSA?
LASIK is eligible for reimbursement with flexible spending accounts (FSA), health savings accounts (HSA), health reimbursement accounts (HRA) and limited-purpose flexible spending accounts (LPFSA). Lasik is not eligible for reimbursement with dependent care flexible spending accounts (DCFSA).
Is electric toothbrush FSA eligible?
Unfortunately, most products for oral health care are not currently eligible medical expenses for FSA and HSA spending.