This includes co-pays, deductibles, prescription medications, and certain over-the-counter items. Because the money is removed from taxable wages, the employee immediately saves money on their federal, state, and sometimes local tax obligations.
FSA Government Plan Open Season Election Guide
It applies to services like daycare, after-school programs, or in-home care that allow the parent or guardian to work. Transportation and Parking FSA These accounts are designed to subsidize the costs of commuting to and from work.
Funds can be used for public transit passes, rideshares, or parking fees at a worksite. These funds are then deposited into an account managed by the employer or a third-party administrator.
FSA Government Plan Open Season Election and What to Know
Eligibility hinges on the dependent being under a specific age or requiring constant supervision. By allocating dollars to the account, a worker in the 22% federal tax bracket effectively earns that portion of their income tax-free.
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