Boost Your Benefits: Dependent Care FSAs Get a Big Upgrade for 2026!

Employers seeking to offer family-friendly benefits may want to consider flexible spending accounts (FSAs) for dependent care. These FSAs let employees make pre-tax contributions through payroll withholding to help cover eligible expenses. Thanks to the recently passed One, Big, Beautiful Bill Act, the annual contribution limit, currently $5,000, will rise to $7,500 in 2026. FSA contributions reduce employees’ income tax and payroll tax and employers’ payroll tax. Withdrawals used to pay qualified expenses are tax-free. These include expenses for care for a child under age 13 or another dependent unable to care for themselves due to physical or mental limitations. Contact us with questions.