Wife and I are married filing jointly. She is not highly compensated. Her employer is only allowing her to elect up to $5000 for the dependent care FSA for 2026. I read that in 2026, the limit has increased to $7500 for employees that are not highly compensated. I am considered highly compensated, but my employer will let me elect up to $2500 for the DCFSA. So my question is, am I allowed to elect that $2500 and take that money home tax free?
Obviously, we are paying more than $7500/year in child care expenses.
If my wife’s employer only allows up to $5k to be contributed into the DCFSA, can I contribute $2500 through my employer for 2026 if I’m highly compensated?
byu/mhollo13 intax
Posted by mhollo13
1 Comment
Yes, since you are filing jointly, the two of you combined can split the $7500 however you wish.
HCE limitations only apply in the context of your particular employer and what they allow within their plan rules, to avoid disproportionately benefiting HCEs. If your employer lets you contribute $2500 as an HCE, that’s fine. Your wife’s contributions don’t factor into that.