Contributions

​Flexible spending accounts (FSAs) are an optional benefit, funded by your pretax contributions. FSAs are considered tax-advantaged because, under IRS rules, you don’t pay taxes on your contributions. The maximum amount you may contribute for the year is set by the IRS. Your employer pays administrative costs associated with these accounts.

​Healthcare FSA

If you are eligible and elect to participate, you make healthcare FSA contributions through pretax payroll deductions, up to annual limits set by the IRS. The annual contribution limit for 2021 is $2,750 (unchanged from 2020); this limit applies whether or not you have eligible family members who may benefit from the funds in your FSA. You elect to participate in these accounts annually and designate the amount you wish to contribute for the year. The Consolidated Appropriations Act, 2021, has temporarily increased the flexibility of FSA elections in 2020 and 2021. Learn more about how this legislation may affect you.

You do not pay federal income and FICA (Social Security and Medicare) taxes on FSA contributions. You also do not pay SECA taxes on these contributions if you receive a W-2 statement. If you receive 1099 forms rather than W-2 statements, you may not participate in an FSA. State income taxes also don’t apply except in New Jersey.

The amount you elect to contribute for the year is prorated and deducted in equal amounts each pay period. The entire amount you elected to contribute for the year is available on

  • the first day of the plan year if you enroll during annual enrollment; or
  • the first day of your participation if you enroll as a newly eligible employee.

Dependent care FSA

If you are eligible and elect to participate, you make dependent care FSA contributions through pretax payroll deductions, up to annual limits set by the IRS. The annual contribution limit is

  • In 2021: The American Rescue Plan Act (ARPA) raises the annual limits for pretax contributions to dependent care FSAs in 2021 only. Single taxpayers, and married couples filing jointly can now contribute up to $10,500. Married individuals filing separately can now contribute up to $5,250.
  • In other years: $5,000 ($2,500 if married and filing separately; additional limits apply if your spouse earns less than $5,000 a year, is a full-time student, or incapable of self-care).*

You elect to participate annually and designate the amount you wish to contribute for the year. The Consolidated Appropriations Act, 2021, has temporarily increased the flexibility of FSA elections in 2020 and 2021. Additionally, because of this and changes through ARPA, all employees with a dependent care FSA through the Board of Pensions may be able to change the amount they have elected to set aside in 2021. Learn more about how these two pieces of legislation may affect you.

You do not pay federal income and FICA (Social Security and Medicare) taxes on FSA contributions. You also do not pay SECA taxes on these contributions if you receive a W-2 statement. If you receive 1099 forms rather than W-2 statements, you may not participate in an FSA. State income taxes also don’t apply except in New Jersey and Pennsylvania.

The amount you elect to contribute for the year is prorated and deducted in equal amounts each pay period. Funds become available to use as they are deposited in your account. You may be reimbursed for eligible expenses up to the amount in your account at the time payment is requested.

*The contribution limits for a dependent care FSA do not normally change from year to year.