FSA contribution (Health or Dependent Care) on your paycheck
Pre-tax flexible spending account. Use-it-or-lose-it.
A Health FSA reduces federal income tax and FICA. Most FSAs are use-it-or-lose-it within a plan year (some carryover or grace period). 2025 health FSA limit is $3,300 (verify employer-specific cap).
How it usually appears
Category: pre-tax
Tax interaction
- Reduces federal taxable wages: Yes
- Reduces FICA wages: Yes
- Reduces state taxable wages: Usually yes
Official sources
- IRS Publication 15 (Circular E), Employer's Tax Guide — IRS · 2025 · last verified 2025-04-01
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