An FSA, or Flexible Spending Account, is an employer-sponsored plan that allows you to set aside dollars from your paycheck on a non-taxed basis. FSA deferrals are exempt from federal taxes, Social Security (FICA) taxes and, in most cases, state income taxes.

You can set aside FSA dollars for two separate purposes: 

  • Medical reimbursement deferrals can be used to reimburse eligible medical expenses incurred by you and your eligible dependents.
  • Dependent care deferrals can be used to reimburse eligible child care expenses for children under age 13.

The money in your FSA can be used for eligible health and/or dependent care expenses that are incurred during the plan year. 

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