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The OBBBA Effect: Should We Increase Our Dependent Care FSA Contribution Limit?
Willis Towers Watson 
[Guidance Overview] Aug. 13, 2025 "Increasing the maximum pre-tax contributions employees can make to a DCFSA ... may cause the DCFSA to be discriminatory under IRC section 129. This is because it is likely that highly compensated employees (HCEs) will utilize the increase more than lower-paid employees.... [C]onsider conducting projected non-discrimination testing to assess the potential for failure and the resulting tax consequences for HCEs." MORE >> |
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