I've tried looking this question up but can't seem to find a satisfactory answer.
Open enrollment is here so my spouse and I are choosing our healthcare elections and whatnot. We will both be classified as highly compensated employees (HCEs) at our respective companies for 2026. The max I can contribute to my dependent care FSA is $2000 while my spouse's max will be $3200.
I know the IRS limits DCFSA contributions to $7500. But does this amount get reduced if we are both HCEs? Or another way to phrase the question, can we both still contribute to our respective DCFSAs for a max of $5200, and remain under the $7500 IRS limit?
Just thinking of how best to maximize the child/dependent benefits we have available, i.e. how to balance DCFSAs and CDCC (we have 2 dependents).
Thanks!
Dependent care FSAs for dual high earners
byu/ThePassive0ne intax
Posted by ThePassive0ne
2 Comments
AFAIK, the HCE limits are on the employer’s side, not the employee’s. So yes, you can contribute $2k and your spouse can contribute $3200 without any problems.
The cap you each can contribute will depend on each of your employer plan and the testing they do. But the limit may be much lower. Going from memory I think my limit was $1400 when the IRS limit was $5000 or so (numbers not exact just to give you a sense of scale). Edit: no the overall amount won’t be reduced