A Flexible Spending Account (FSA) is a tax-advantaged, employer-maintained savings account that allows for tax free savings to employees on qualified expenses. We support 4 types of FSAs.
Dependent Care
Employees can use this pre-tax employee deduction toward their employer-maintained/provided Dependent Care Flexible Spending Account (FSA). Assistance payments may include preschool, summer day camp, before/after school programs, and child/adult daycare. These amounts will get reported on W2 Box 10.
Medical
A medical/health flexible spending account (FSA) is an employer-maintained plan that lets employees use pre-tax dollars to pay for eligible health care expenses. There is an annual maximum limit that is set by the IRS.
Parking
This is a pre-tax employee deduction toward a qualified employer-maintained Parking Flexible Spending Account (FSA). This amount is deducted from the first check of the month only.
Transportation
This is a pre-tax employee deduction toward an employer-maintained Transportation Flexible Spending Account (FSA). This amount is deducted from the first check of the month only.
Health Savings Account (HSA)
This is an employee deduction toward an employer-maintained Health Savings Account (HSA) plan for employees with a high-deductible health plan (HDHP). Employees who do not have HDHP coverage are not eligible for HSA contributions. If a company matches an employee's contributions, matching contributions can only be made through a Section 125 plan. Non-discrimination rules apply.
IMPORTANT: Employees must have an HSA-qualified health insurance in place by December 1st in order to qualify for a tax break for the year.