Can I Use My FSA Card for Gas Purchases?

Flexible Spending Accounts (FSAs) offer a tax-advantaged way to pay for qualified out-of-pocket healthcare expenses. Participants set aside pre-tax money from paychecks, which can be used for eligible medical costs throughout the plan year. Understanding qualified expenses maximizes FSA benefits.

Understanding Flexible Spending Accounts

A Flexible Spending Account is an employer-sponsored benefit allowing employees to contribute pre-tax dollars from their salary for qualified medical expenses. This pre-tax funding reduces taxable income, potentially leading to tax savings. FSAs primarily help manage healthcare costs not covered by health insurance, including deductibles, co-payments, and certain over-the-counter medical products.

The IRS defines “qualified medical expenses” as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any body structure or function. While FSAs offer tax advantages, they generally operate under a “use-it-or-lose-it” rule, meaning unspent funds may be forfeited by year-end. Some plans offer a grace period of up to two and a half months or allow a limited carryover, such as up to $640, to the next year.

Gas Purchases and FSA Eligibility

General gas purchases for routine commuting or personal travel are not eligible FSA expenses. FSAs are strictly designed to cover costs directly related to medical care as defined by IRS regulations. Fuel purchases for daily commutes or personal errands do not meet qualified medical expense criteria. These are considered general living costs and fall outside healthcare scope.

The IRS guidelines for FSA reimbursement do not include everyday transportation expenses unrelated to medical treatment. An expense generally does not qualify if it is not primarily for preventing or alleviating a physical or mental illness. Therefore, using an FSA card for non-medical vehicle fueling is not permissible and subject to disallowance by the FSA administrator.

Eligible Medical Transportation Expenses

While general gas purchases are not eligible, certain transportation costs directly linked to medical care can be reimbursed through an FSA. This includes mileage for traveling to doctor’s appointments, hospital visits, therapy sessions, or to pick up prescribed medications. For 2025, the IRS allows a medical mileage rate of 21 cents per mile for qualified travel. This rate covers the cost of operating a personal vehicle for medical purposes.

Other eligible transportation expenses include bus, train, taxi, or ambulance fares used to obtain medical services. Parking fees and tolls incurred during travel to a medical appointment are also qualified expenses. Transportation must be primarily for and essential to medical care, not merely for general health or personal convenience. Detailed records, such as mileage logs and receipts for fares, parking, and tolls, are necessary to substantiate claims.

Tips for Using Your FSA Card

When using your FSA card, always keep itemized receipts for purchases. While the card may process transactions instantly, your FSA administrator might request documentation to verify expense eligibility. Receipts should clearly show the date of service, type of service or item, patient’s name, and amount. Credit card receipts or bank statements alone are often not sufficient for substantiation.

Regularly check with your FSA plan administrator or review your plan’s specific list of eligible expenses. While IRS guidelines provide a broad framework, individual FSA plans may have slight variations or specific requirements. Maintaining accurate records and understanding plan nuances helps ensure compliance and smooth reimbursement, preventing potential issues or fund forfeiture.