Tax Guide

Get answers to all your questions about taxes, personal finance, insurance and more.

Who’s Eligible for an FSA?

The three different Flexible Spending Accounts each have different eligibility requirements. One requirement that all three FSAs share is that you can’t be self-employed. Only employees of eligible employers can be enrolled in an FSA. (If you are self-employed, check out a Medical Savings Account (MSA) instead.)

You may be eligible for one or more FSAs, which probably have different amounts that you can contribute. You can’t move money from one FSA to another, and if you don’t use the balance, you’ll usually lose what’s left at the end of the plan year.

Eligibility Requirements

Generally, to be eligible for an FSA, you just have to be an employee of an employer who offers an FSA. Unlike an HSA, you do not have to be covered by a High Deductible Health Plan (HDHP). You can have several insurance plans or none. You’re not required to have health coverage to be eligible for a health FSA.

What if I have an HSA and want an FSA? You’re eligible for a limited health FSA, which covers only dental and vision expenses. You may contribute to both an HSA and a limited FSA to maximize tax deductions and savings. You may still contribute the maximum for both the HSA and a limited health FSA.

What are the requirements for having a dependent care FSA? First, your employer must offer one. You also can’t use money from a health FSA or a limited health FSA for child care expenses. You or your spouse must work or be looking for work for the child care costs to be eligible. You and your spouse may contribute up $5,100 if filing jointly. If you’re filing single or married filing separately, the limit is still $2,550 – like a normal FSA.

For the dependent care costs to be eligible, the child must be under 13 years old. If the child turns 13 during the plan year, any child care expenses after the birthday are ineligible. But: If you have a child or other dependent relative over age 13 who is mentally or physically incapable of caring for themselves, your dependent care FSA can be used to pay for expenses. See Who Can You Claim as a Dependent?

See also:
FSAs and Your Tax Return
Withdrawing from an FSA
FSA Qualifying Expenses