What is the maximum amount for 2018 that an employee may elect for FSA dependent care?

What is the maximum amount for 2018 that an employee may elect for FSA dependent care?

• A. $2,400
• B. $5,000
• C. $7,500
• D. No Limit

Answer: (B)

The maximum amount an employee may elect for a Flexible Spending Account (FSA) designated for dependent care in 2018 is indeed $5,000. This limit applies to employees who are married and filing jointly, or for single parents. If an employee is married but filing separately, the individual limit is set at $2,500. This amount is in place to help families with the costs associated with caring for dependent children under the age of 13 or for qualifying dependents who are unable to care for themselves. The dependent care FSA allows employees to set aside pre-tax dollars to pay for these expenses, which can significantly reduce their taxable income. The other options do not accurately reflect the contribution limit set by the IRS for this type of FSA in 2018. Understanding these limits is crucial for employees looking to maximize their benefits while managing taxable income effectively.

The maximum amount an employee may elect for a Flexible Spending Account (FSA) designated for dependent care in 2018 is indeed $5,000. This limit applies to employees who are married and filing jointly, or for single parents. If an employee is married but filing separately, the individual limit is set at $2,500.

This amount is in place to help families with the costs associated with caring for dependent children under the age of 13 or for qualifying dependents who are unable to care for themselves. The dependent care FSA allows employees to set aside pre-tax dollars to pay for these expenses, which can significantly reduce their taxable income.

The other options do not accurately reflect the contribution limit set by the IRS for this type of FSA in 2018. Understanding these limits is crucial for employees looking to maximize their benefits while managing taxable income effectively.