FSA Limit, Changing Job

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onyxlinkia
Posts: 69
Joined: Tue Feb 26, 2008 12:13 am

FSA Limit, Changing Job

Post by onyxlinkia » Mon May 14, 2018 12:23 am

Hi, I have enrolled and claimed $500 of FSA at company A. I'm going to company B, can I still enroll in FSA for $2000?

Thanks.

bloom2708
Posts: 3955
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: FSA Limit, Changing Job

Post by bloom2708 » Mon May 14, 2018 2:57 pm

Assume $1,500 is your FSA balance at company 2.

Company 2 doesn't know about Company 1, so you COULD do $2,000. Come tax time, though you over shot your FSA amount and will have to pay tax on the $500 that should have have been tax-advantaged.

Same goes for 401k contributions. $18,500 is the max even if you work at 2 or 3 different companies in a year.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

Spirit Rider
Posts: 7821
Joined: Fri Mar 02, 2007 2:39 pm

Re: FSA Limit, Changing Job

Post by Spirit Rider » Mon May 14, 2018 3:19 pm

bloom2708 wrote:
Mon May 14, 2018 2:57 pm
Assume $1,500 is your FSA balance at company 2.

Company 2 doesn't know about Company 1, so you COULD do $2,000. Come tax time, though you over shot your FSA amount and will have to pay tax on the $500 that should have have been tax-advantaged.

Same goes for 401k contributions. $18,500 is the max even if you work at 2 or 3 different companies in a year
This is correct for 401k employee elective contributions, but it is NOT true for FSA plans.

As long as the employers are unrelated, you can use the full contribution amount at each employer. Note: You can use up to your full year's FSA enrollment even if it is greater than your current contribution by the time you leave the first employer.

From IRS Notice IRS Notice 2012-40 Section 125 - Cafeteria Plans, bottom page 5 and top of page 6.

"However, an employee employed by two or more employers that are not members of the same controlled group may elect up to $2,500 (as indexed for inflation) under each employer’s health FSA."

onyxlinkia
Posts: 69
Joined: Tue Feb 26, 2008 12:13 am

Re: FSA Limit, Changing Job

Post by onyxlinkia » Wed May 16, 2018 11:23 am

Thanks so much for the clarification, Bloom2708 and Spirit Rider. This is indeed good news for me.
Spirit Rider wrote:
Mon May 14, 2018 3:19 pm
bloom2708 wrote:
Mon May 14, 2018 2:57 pm
Assume $1,500 is your FSA balance at company 2.

Company 2 doesn't know about Company 1, so you COULD do $2,000. Come tax time, though you over shot your FSA amount and will have to pay tax on the $500 that should have have been tax-advantaged.

Same goes for 401k contributions. $18,500 is the max even if you work at 2 or 3 different companies in a year
This is correct for 401k employee elective contributions, but it is NOT true for FSA plans.

As long as the employers are unrelated, you can use the full contribution amount at each employer. Note: You can use up to your full year's FSA enrollment even if it is greater than your current contribution by the time you leave the first employer.

From IRS Notice IRS Notice 2012-40 Section 125 - Cafeteria Plans, bottom page 5 and top of page 6.

"However, an employee employed by two or more employers that are not members of the same controlled group may elect up to $2,500 (as indexed for inflation) under each employer’s health FSA."

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