bcspace Posted January 14, 2010 Share Posted January 14, 2010 I realize that a husband and wife who both have day care accounts, whether from the same company or different companies, can only have $5000 in total elections and the rest would have to be treated as taxable income. However, is there anything preventing a case where husband and wife both work for the same company and each elect the max for their individual medical FSA's? The only thing I can see at the moment is that the plan administrator would have to ensure that there is no double-dipping of claims. Link to comment Share on other sites More sharing options...
Guest Sieve Posted January 15, 2010 Share Posted January 15, 2010 They could each defer the max. into a cafe plan, but, the aggregate amount they used above $5,000 would be considered income (see Prop.--still, I think--Treas. Reg. Section 1.125-1(j) and, of course, IRC Section 129(a)(2)). And, if not used from the cafe plan by year-end, the unused portion would be LOST--so they'd have to use it to keep from losing it, and then include it in income. So, I'm not so sure that the administrator should prevent them from using the full $10,000 for DECAP purposes. In fact, if you prevent them from doing so, they'd lose $5,000. Link to comment Share on other sites More sharing options...
Bill Presson Posted January 15, 2010 Share Posted January 15, 2010 They could each defer the max. into a cafe plan, but, the aggregate amount they used above $5,000 would be considered income (see Prop.--still, I think--Treas. Reg. Section 1.125-1(j) and, of course, IRC Section 129(a)(2)).And, if not used from the cafe plan by year-end, the unused portion would be LOST--so they'd have to use it to keep from losing it, and then include it in income. So, I'm not so sure that the administrator should prevent them from using the full $10,000 for DECAP purposes. In fact, if you prevent them from doing so, they'd lose $5,000. Larry, I think you missed the question. The question was about the medical FSA. There is no problem with both husband and wife electing the full $5,000 each for their medical FSA's. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
GBurns Posted January 15, 2010 Share Posted January 15, 2010 As far as I recall, the limit for a medical FSA is set by each plan and not by the Treas Regs. George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction) Link to comment Share on other sites More sharing options...
Guest Sieve Posted January 15, 2010 Share Posted January 15, 2010 Bill -- I certainly did misread the question. I agree with your conclusion. As to George's comment, I've heard that there may well be a medical FSA limitation in the new health care legislation--something like $2,500. Link to comment Share on other sites More sharing options...
Chaz Posted January 29, 2010 Share Posted January 29, 2010 Bill --I certainly did misread the question. I agree with your conclusion. As to George's comment, I've heard that there may well be a medical FSA limitation in the new health care legislation--something like $2,500. Ha! What new health care legislation? Link to comment Share on other sites More sharing options...
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