|Medical Flexible Spending Account||Dependent Care Spending Account|
Helps you pay expenses that are not covered by your medical, pharmacy, dental, or vision plans.
Helps you pay expenses incurred for having someone care for your dependent(s) while you work.
When you establish a flexible spending account, you are setting money aside to pay for certain expenses before the money is taxed. You may also request reimbursement as you incur eligible expenses.
A Medical Flexible Spending Account and a Dependent Care Spending Account are accounts set up for you to set aside pre-tax dollars on a bi-weekly basis to help pay your healthcare expenses that are eligible under the IRS code or daycare expenses. The benefit of using either of these accounts is that you do not pay federal and state income taxes or Social Security taxes on the money that goes into the account. This lowers your taxable income.
- If you are using pre-tax dollars to reimburse yourself for out-of-pocket medical or daycare expenses, you cannot claim those expenses as a deduction on your annual income tax.
- Flexible Spending Accounts must be used for expenses incurred during the plan year.
- If you do not use the money when the plan year is over, you lose it. Flexible Spending Account dollars do not roll over into the next year.