Are all taxes avoided on earnings deposited to my FSA?
Contributions deposited to an FSA are NOT taxable for Social Security, Federal and most State taxes. Local taxes depend on the municipality to which you pay taxes. City tax is generally not payable in Ohio. Your Social Security benefits may be slightly reduced because of participation in the program. If you participate in the dependent […]
Do I have to file any forms with the IRS at the end of the year?
Yes for the dependent care FSA. To qualify for tax free treatment, you will be required to file IRS Form 2441 (Child and Dependent Care Expenses) with your annual tax return (Form 1040) or a similar form. You must list on Form 2441 the names and taxpayer identification numbers of any persons who provided you […]
If I participate in the work-related dependent care FSA, will I still be able to claim the household and dependent care credit on my federal income tax return?
You may not claim any other tax benefit for the tax free amounts reimbursed by the plan.
For my work-related dependent care expenses I can use the Federal tax credit on my tax return. Which is better, the dependent care FSA or the tax credit?
In general, if your total household income is less than $25,000, the Federal tax credit is better. The dependent care FSA is probably better if your income is higher than $25,000. The FSA may also be better because it has a lump sum limit of $5,000 for all work-related child care expenses regardless of the […]
Does everyone taking the group insurance automatically have their required contribution made pre-tax?
Yes.