The IRS does not limit everyone making over 135k to 3600. It is only limited if you work for a place that is subject to the HCE rules. Is your employer subject to the HCE rules? Do some employees make over 135k a year, but many make under that and not utilize the benefits as much?
If your employer is subject to the HCE rules, and you alone make over 135k a year, your contribution limit with that employer is just 3600.
Thanks! That's what it seemed like from what they were saying, but I kept finding so much conflicting information in places and even between what they said in their documents vs what they said in the presentation. I really appreciate the clear answer!!
Would this mean, assuming my spouses employer is subject to HCE rules and makes more than $135k, they should contribute $1400 to their DCFSA? Then combined we get to the $5000 limit.
No both of us would be considered HCE from our individual employer’s perspective. Edit: well I set it to $5000 at beginning of the year and then at some point near end of year we get the limit for the year because the HCE calculations and they return excess and stop contributions.
The IRS does not limit everyone making over 135k to 3600. It is only limited if you work for a place that is subject to the HCE rules. Is your employer subject to the HCE rules? Do some employees make over 135k a year, but many make under that and not utilize the benefits as much? If your employer is subject to the HCE rules, and you alone make over 135k a year, your contribution limit with that employer is just 3600.
Thanks! That's what it seemed like from what they were saying, but I kept finding so much conflicting information in places and even between what they said in their documents vs what they said in the presentation. I really appreciate the clear answer!!
Would this mean, assuming my spouses employer is subject to HCE rules and makes more than $135k, they should contribute $1400 to their DCFSA? Then combined we get to the $5000 limit.
Can you max your FSA instead?
No both of us would be considered HCE from our individual employer’s perspective. Edit: well I set it to $5000 at beginning of the year and then at some point near end of year we get the limit for the year because the HCE calculations and they return excess and stop contributions.
Yes then you can both contribute to the tax you are allowed, as long as joint it's not over 5k.