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lnomm34
USA Fan
Louisiana
Member since Oct 2009
9510 posts

Over Contributed to Dependent Care FSA
A few questions for the professionals on the board. Here is a quick synopsis of my situation:

I switched jobs in July. I had money in a Dependent Care FSA with previous employer. I have no idea how I screwed up, but I calculated incorrectly and I just realized that I have over-contributed to the FSA (above my needs for the year and above the $5,000/year IRS limit).

I am still kicking myself in the arse for screwing up.

I put in $2,578.32 with my previous employer. And for some reason, I elected to put $3,400 the remainder of the year with my current employer. That puts me contributing $5,978.32 total for the year. Obviously over the $5,000/year limit.

I also only needed $4,867 for child care expenses for the total year. So I have no clue why I screwed up my math.

In total, I somehow contributed $1,111.32 more than I need for the year and $978.32 more than the IRS limit.

Do I lose the entire over-contribution ($1,111.32)? Or do I only lose the portion up to the allowable $5,000 limit ($133) and get the remaining $978.32 back with taxes due on that portion?

Any advice/guidance would be appreciated.


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
9316 posts

re: Over Contributed to Dependent Care FSA
Have you actually put all the money in for your new employer??

Usually they divide up the 3.400 by remaining checks. So there are still a few checks left in the year, I wonder if maybe you haven't actually conributed 5,000 total yet... and can ask your employer to turn it off because you made a mistake.

Let's get an answer to that... and a total on exactly how much is acturally conributed at this point... and then we can figure out a solution.


lnomm34
USA Fan
Louisiana
Member since Oct 2009
9510 posts

re: Over Contributed to Dependent Care FSA
quote:

Usually they divide up the 3.400 by remaining checks. So there are still a few checks left in the year, I wonder if maybe you haven't actually conributed 5,000 total yet... and can ask your employer to turn it off because you made a mistake.


From what I'm understanding, I cannot make changes to my elections midyear. I have to wait for open enrollment (or have a 'qualifying life event'). They are taking out the money in equal amounts from my checks.

To date, I have contributed $3,875.09. I have $309.09 coming out biweekly until the end of the year.
This post was edited on 10/4 at 10:19 am


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
9316 posts

re: Over Contributed to Dependent Care FSA
quote:


From what I'm understanding, I cannot make changes to my elections midyear. I have to wait for open enrollment (or have a 'qualifying life event').


Right. I wonder if your plan will make an exception for an obvious error. You need to call them and ask. Maybe, maybe not. If they will fix an obvious error, then do that.

If they won't... then you for sure will owe income tax on the amount over 5K.

For the amount under 5K but doesn't get spend... does your plan allow for a three month extension to use the money? Some plans allow you an extra three months to use it... some don't. If the plan allows it... just use that money in Jan 18. If it doesn't... you won't owe tax on the money, but you will lose it.


lnomm34
USA Fan
Louisiana
Member since Oct 2009
9510 posts

re: Over Contributed to Dependent Care FSA
quote:


quote:

From what I'm understanding, I cannot make changes to my elections midyear. I have to wait for open enrollment (or have a 'qualifying life event').



Right. I wonder if your plan will make an exception for an obvious error. You need to call them and ask. Maybe, maybe not. If they will fix an obvious error, then do that.

If they won't... then you for sure will owe income tax on the amount over 5K.


I just asked that question. I'll see if there is any method to correct that error. I really think I 'fat-fingered' it and meant to put $2,400, which would be the right amount for the remainder of the year with the new employer.

Fingers crossed. I hate making these kinds of mistakes.


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Mr.Perfect
LSU Fan
Louisiana
Member since Mar 2013
14043 posts

re: Over Contributed to Dependent Care FSA
Shockingly, claiming your spouse or SO had a job change , lost job, pay change... whatever... can qualify as a life event.


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