Participants that enroll in a Health Savings Account are not eligible for the Health Care FSA.
Health Care FSA
The health account allows you to fund your out-of-pocket medical, dental and vision expenses, such as copays and deductibles, with pre-tax dollars. By paying for out-of-pocket medical expenses with pre-tax dollars, you will save a minimum of $.23 per dollar because you do not pay Federal Income Tax or FICA tax on your contributions. New Horizons Baking Company allows a voluntary contribution of up to $2,700 per plan year into your healthcare expense account. The plan year runs January 1, 2023 through December 31, 2023. Participants may carry over up to $500 of unused Health FSA funds remaining at the end of the plan year to the following plan year immediately following.
Flexible Spending Accounts (FSAs) should only be considered for anticipated expenses. You should be conservative when estimating the amount to contribute to each account. If you overestimate your expenses and have money left in the account at the end of the year, up to $500 can be carried over the next plan year or monies may be forfeited. For a small percentage of participants, Social Security retirement benefits may be affected by participating in FSAs. Participation in this plan reduces your W-2 income, on which retirement benefits are based.
Dependent Care FSA
This account allows you to fund the costs of dependent care on a pre-tax basis. The care must be provided by a dependent care center or by an individual who can provide a name, address, and taxpayer identification number. You may contribute up to $240 minimum and a maximum of $5,000 each year, per household. Although you may not take the childcare tax credit if you choose this option, you may save more depending on your income level.
- You can use your account throughout the year to help pay for eligible expenses; funds must be in the account before being reimbursed.
- Your expense must be for the purpose of allowing you and, if married, your spouse to work.
- If you are married and file a joint tax return, your combined maximum election amount is $5,000. If you are married but filing separate tax returns, the maximum amount is $2,500.
- A dependent care FSA helps reimburse you for the work-related cost of care for a qualifying dependent. A qualifying dependent is:
- A tax dependent of yours who is under age 13, or
- Any other tax dependent of yours, such as an elderly parent, who is physically or mentally incapable of self-care and has the same principle residence as you
- A spouse who is physically or mentally incapable of self-care and has the same principle residence as you.
- The current plan year runs January 1, 2023 through December 31, 2023.
