What are the FSA rules for 2025?
Asked by: Liza Schmeler | Last update: April 8, 2025Score: 4.2/5 (43 votes)
What are the IRS guidelines for FSA 2025?
For 2025, participants may contribute up to an annual maximum of $3,300 for a HCFSA or LEX HCFSA. The Dependent Care FSA (DCFSA) maximum annual contribution limit did not change for 2025. It remains at $5,000 per household or $2,500 if married, filing separately.
What is the FSA limit for child care in 2025?
You contribute up to the IRS limit each year (in 2025, that's $5,000 for most people) to use for qualifying dependent care expenses. Your FSA contributions are deducted from your paycheck before taxes are withheld, which reduces your taxable income and saves you money on taxes (depending on your situation).
Can you use 2025 FSA for 2024 expenses?
Grace period
* It basically extends the length of time you can use your FSA funds beyond the end of the plan year. In this example, your plan year is January 1, 2024 through December 31, 2024. You have until March 15, 2025 to use the remaining funds in your FSA and until March 31, 2025 to file a claim.
How much FSA can roll over to 2026?
Employees enrolled in Health Care FSA in 2025 can roll over up to $670.00 into 2026. Claims from 2025 must be submitted by March 31, 2026 to be reimbursed. If the carryover funds are not used for prior plan year expenses, participates will not lose it.
2025 FSA Limits: What You Need to Know
Can you carry over FSA funds in 2025?
For the 2025 benefit period, you can contribute up to a maximum of $3,300 - an increase of $100 from the 2024 benefit period. You may also carry over unused funds up to a maximum of $660 into 2026 - an increase of $20 from the 2024 benefit period, as long as you re-enroll.
Can you use FSA for gym membership?
But that's not all a Letter of Medical Necessity can do for you. You can even pay for your gym membership with FSA/HSA funds, making it easier than ever to access top-of-the-line equipment like the models we have in our studios.
What happens to unspent FSA money?
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 you use FSA for dental?
You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if you're married, and your dependents. You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums.
Are diapers FSA eligible?
Regular diapers for newborns and infants are not FSA eligible because they do not treat a medical condition, but rather aid a healthy function of the body. There are some ways to save, however, including sales, coupons, buying in bulk or joining rewards programs.
What is the FSA limited purpose for 2025?
A Limited Purpose Flexible Spending Account allows you to use pre-tax dollars to pay eligibe dental and vision expenses not covered by your dental or vision plans. An LPFSA cannot be used to cover medical expenses or over the counter expenses.
What is the IRS limit for 2025?
Highlights of changes for 2025. The annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government's Thrift Savings Plan is increased to $23,500, up from $23,000. The limit on annual contributions to an IRA remains $7,000.
Can I pay my babysitter with dependent care FSA?
Yes! You can include expenses paid to a babysitter if the services are necessary for you and your spouse, if married, to work, look for work, or attend school full-time. However, your dependent care costs are not eligible if you did not find a job and have no earned income for the year.
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.
What is the 1.50 commuting rule?
value of a vehicle they provide to an employee for commuting use by multiplying the number of one-way commutes by $1.50. Use of this rule is subject to stringent requirements, such as having a written policy limiting the employee's use to commuting and de minimis personal use.
Are tampons FSA eligible?
Feminine hygiene products: Pads, liners, and tampons all qualify as FSA-eligible expenses. The end of the year is a good chance to stock up if you need to. Pain relievers: Over-the-counter pain medications such as Aleve, Tylenol, and generic versions of the drugs are available for purchase through FSA funds.
Can you use FSA for glasses?
Can I use my FSA on all prescription eyewear? Yes, you can use it to buy prescription glasses, sunglasses and contact lenses all year round.
Can FSA be used for vitamins?
However, when it comes to FSA/HSA eligibility, most vitamins and nutritional supplements are not eligible, with a few notable exceptions. But since these products fall into an eligibility gray area, we will clear up the confusion as to what may make it onto your FSA shopping list!
How much of my FSA can I roll over to 2025?
For FSAs that permit the carryover of unused amounts, the maximum carryover amount to 2025 is $660, increasing from $640 in tax year 2024.
Can I pay for massage with FSA?
Massage Therapy may be eligible for reimbursement with a Letter of Medical Necessity (LMN) with flexible spending accounts (FSA), health savings accounts (HSA) and health reimbursement arrangements (HRA).
Can I cash out my FSA?
You can't withdraw money from an ATM
One of those is that the money can only be spent on FSA-eligible expenses. The easiest way to be sure your purchases are eligible is to shop at a store that exclusively sell FSA-eligible items (hint: FSAstore.com).
Does FSA cover Apple Watch?
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.
What happens if I accidentally used my HSA card for groceries?
You can repay the incorrect distribution before filing your federal taxes for that tax year. However, if you do not correct the mistake, the unqualified amount will be subject to income tax, and you may also face an additional 20% tax penalty.
Is Planet fitness FSA eligible?
Can you use flexible spending account (FSA) funds to pay for a gym membership or exercise classes? Typically, no. The Internal Revenue Service (IRS) usually doesn't allow funds from an FSA to pay for membership dues at health clubs or gyms.