Flexible Savings Account (FSA)
An employee who chooses to participate in an FSA can contribute up to $3,300 through payroll deductions during the 2025 plan year. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax.
If the plan allows, the employer may also contribute to an employee’s FSA. If the employee’s spouse has a plan through their employer, the spouse can also contribute up to $3,300 to that plan. In this situation, the couple could jointly contribute up to $6,600 for their household.
For FSAs that permit the carryover of unused amounts, the maximum carryover amount to 2025 is $660, increasing from $640 in tax year 2024. The carryover doesn’t affect the maximum amount of salary reduction contributions that can be made.
It’s important for taxpayers to annually review their health care selections during health care open enrollment season and maximize their savings. Follow this link for full policy details from the IRS.
FSA amounts must be elected prior to January 1, 2025. All medical expenses that occur 1/1/25–12/31/25, can then be reimbursed through the Diocesan FSA cafeteria plan by submitting receipts for eligible expenses. Rollover of unused funds is allowed up to $660 for a grace period into the following year of up to 2 1/2 months after the end of the plan year for all 2024 expenses. Therefore, the grace period ends on March 15, 2025. For a full list of guidelines view IRS Publication 969.
Starting in 2025, each parish can elect to run their own FSA program instead of going through the Diocese for reimbursement. If that is something that interests you, please email [email protected].
FSA Enrollment
If you plan to enroll in the Flexible Spending Account, please have this FSA election form filled out by 12/31/24 to be eligible.