Can You Have 2 FSA Accounts? Key Rules to Know
Uncover the essential rules for holding multiple Flexible Spending Accounts. Maximize your tax-advantaged savings by understanding key limits.
Flexible Spending Accounts (FSAs) offer a tax-advantaged way for individuals to manage out-of-pocket expenses. These employer-sponsored benefits allow participants to set aside pre-tax money from their paycheck for eligible costs. This reduces taxable income, potentially leading to savings on federal, Social Security, and Medicare taxes. FSAs provide a structured method for budgeting and paying for anticipated expenses throughout the plan year.
Understanding FSA Types
Flexible Spending Accounts primarily come in two distinct types: the Health Flexible Spending Account (HFSA) and the Dependent Care Flexible Spending Account (DCFSA). Each type serves a unique purpose, covering different categories of expenses.
A Health Flexible Spending Account is designated for eligible medical, dental, and vision expenses not covered by health insurance. This can include co-payments, deductibles, prescription medications, and medical products like eyeglasses or hearing aids. Funds from an HFSA can be used for the participant, their spouse, and eligible dependents, even if those individuals are not covered under the same health plan.
A Dependent Care Flexible Spending Account is specifically designed to cover expenses related to the care of eligible dependents. These dependents typically include children under the age of 13 or individuals of any age who are physically or mentally incapable of self-care and are claimed as dependents on the participant’s tax return. Qualified expenses generally encompass costs for daycare, preschool, before- and after-school programs, and summer day camps, provided these services enable the participant, and their spouse if married, to work or seek employment.
Rules for Multiple Health FSAs
Individuals cannot have two Health Flexible Spending Accounts from the same employer. This limitation ensures employees do not double-dip on tax benefits. Each employer generally offers one HFSA option.
Situations can arise where an individual legitimately has access to more than one HFSA. This commonly occurs when a person works for two separate employers, and both employers offer an HFSA benefit. In such cases, the individual may elect to participate in an HFSA through each employer, managing two distinct accounts.
Another common scenario involves spouses, where each spouse is employed by a different company that offers an HFSA. Each spouse can elect to participate in their respective employer’s HFSA, effectively resulting in two HFSAs within the household. While separate, these accounts remain subject to individual contribution limits, which are aggregated at the individual level rather than the household level.
Rules for Multiple Dependent Care FSAs
Similar to Health FSAs, an individual cannot establish two Dependent Care Flexible Spending Accounts through the same employer. The benefits structure of most companies provides for one DCFSA election per employee. This approach streamlines administration and adheres to tax regulations.
However, multiple DCFSAs can be accessible within a single household. This situation arises when each spouse is employed by a different company, and both employers offer a Dependent Care FSA benefit. Each spouse may then elect to contribute to a DCFSA through their respective employer’s plan.
While each spouse might contribute to a separate DCFSA, the household’s total contributions are subject to a single, combined limit. The combined amount elected by both spouses across their individual DCFSAs cannot exceed the IRS-mandated household maximum, regardless of whether contributions are made to one or two separate accounts.
Contribution Limits with Multiple Accounts
Contribution limits for Flexible Spending Accounts are set annually by the Internal Revenue Service and can change each year. For Health Flexible Spending Accounts, the individual annual contribution limit for 2025 is $3,300. If an individual participates in multiple HFSAs through different employers, their combined contributions must not exceed this individual annual limit.
Dependent Care Flexible Spending Accounts operate under a household limit, which applies to married couples filing jointly and single filers. For plan years beginning in 2025, the household contribution limit for a Dependent Care FSA is $5,000, or $2,500 for married individuals filing separately. For plan years starting on or after January 1, 2026, this household limit increases to $7,500, or $3,750 for married individuals filing separately, due to recent legislative changes. All contributions made by a household, whether through one or two separate DCFSAs, must not exceed this combined household maximum.