FLEXIBLE SPENDING ACCOUNTS
A Flexible Spending Account( FSA) allows you to set money aside on a tax-free basis to pay for eligible health care, dependent day care, and / or commuting expenses. So, you reduce your taxes and increase your take-home pay!
HEALTH CARE FSA
You may contribute up to $ 3,400 tax-free to a Health Care FSA in 2026 and use this money to pay for eligible out-of-pocket health care costs that are not covered by medical, dental, or vision benefits. Examples of eligible health care expenses include:
• Deductibles
• Copays
• Coinsurance
• Orthodontia
• Eyeglasses
• Contact lenses and solutions
• Laser eye surgery
• Hearing aids
• Expenses above what is covered by insurance
For a complete list of eligible expenses, refer to IRS publications # 502 and # 969, available through the IRS website: www. irs. gov / publications.
DEPENDENT CARE FSA
You may contribute up to $ 7,500 per year, tax-free *, into a Dependent Care FSA and use it to pay dependent care expenses for eligible dependents while you are at work. If you are married and your spouse is participating in a similar account or if you are married and filing separate returns, you may contribute up to $ 3,700 per year into this account.
Eligible dependent care expenses include:
• Nursery school
• Licensed day care center
• Care for an elderly parent
• After school care
* Dependent Care FSAs are subject to Pennsylvania state income taxes.
• Babysitting in your home or someone else’ s day camp
For a description of who qualifies as an eligible dependent and a complete list of eligible expenses, refer to IRS publication # 503, which is available through the IRS website: www. irs. gov / publications.
IRS FSA REGULATIONS
The IRS has established certain rules for using Health Care and Dependent Care FSAs:
Use it or lose it. The IRS requires that any money left in your account at the end of the year cannot be returned to you. However, you will have until the following March 15 to incur expenses and until March 31 to file claims for the prior year.
Accounts are not interchangeable. You cannot use the Health Care FSA to pay for dependent care expenses and vice versa. You may not use a Dependent Care FSA to pay for dependent health care expenses.
Mid-year changes are not permitted. Due to the tax-favored status of these accounts, the IRS does not allow mid-year changes to your FSA election, unless you have a qualified status change.
You must re-enroll each year. Enrollment does not roll over into the next year. If you want to participate in an FSA in 2026, you must enroll in it during Open Enrollment.
11 | METROPOLITAN WASHINGTON AIRPORTS AUTHORITY