Flexible spending

October 18, 2022 10:41 AM

I elected to put $1,500 into my tax-free flexible spending account for 2022. I just received paperwork that says that I contributed $1,153.83, withdrew $1,500, and my balance is zero. I thought this was a tax-free account. What's going on?

I don't understand why I contributed $153.83 more than I elected to contribute, and I also don't understand why that money is not accessible to me. What is the point of using a flexible spending account if I'm contributing what appears to be $153.83 in taxes and I don't get that money back? Can someone explain this to me like I am five?

posted by twelve cent archie to Work & Money (7 answers total)

Best answer: Can you check those numbers for accuracy please?

If you get paid biweekly then your $1500 is spread out approx $58 per check over the course of the year. x20 payrolls year to date brings you to $1153 and change. You've spent your annual balance already, but only contributed $1153. You have zero balance because the FSA people know you've spent $1500. The next 6 pay periods of the year will make up the $346 deficit that you owe your FSA.

Taxes aren't relevant in this math.
posted by phunniemee at 10:48 AM on October 18, 2022 [13 favorites]

Best answer: It's unclear to me if you have actually used the account this year. If you haven't, the you should contact the FSA administrator and ask where the withdrawal happened.

If you have used the FSA this year, then it looks like you might be taking advantage of a quirk of FSA law. FSAs are front loaded in the beginning of the year with the entire amount you will contribute through the entire year. Ie, if you elected to contribute $1500 throughout 2022, then $1500 will be deposited into the account on Jan 1, 2022 (approximately). You can actually spend the entirety of your FSA contributions at the beginning of the year, even before you make those contributions.

If this happens, and you spend the FSA before the contributions have happened, having a balance of $0 is expected.
posted by saeculorum at 10:49 AM on October 18, 2022 [2 favorites]

Where I work, I put in $50 per paycheck for a total of $1300 per year (26 pay periods). You can take out the entire $1300 before the end of the year, but they will continue to take out the $50 per paycheck.

Looks like you have funded 75% (which is about right for this time of the year) and you took out the full amount before the end of the year.
posted by jraz at 10:49 AM on October 18, 2022

Best answer: 2022 is not over. You have 5-6 paychecks left for the year if you get paid 2x a month or biweekly. You have also contributed less then $1500 (1,153 is less than 1,500).
posted by soelo at 10:50 AM on October 18, 2022 [3 favorites]

I'm not sure how you withdrew $1,500 from an account with a $1,153.83 balance and ended up with zero.

How much do you think you withdrew from the account? What balance did you expect to see?
posted by cranberrymonger at 10:50 AM on October 18, 2022 [1 favorite]

Best answer: You can spend the full amt of the FSA at the start of the year before the full amt is taken from paychecks. The tax free part is that is comes out of your paycheck pre tax nothing to do with investments.
This looks ok except that you don't seem to know why your balance is 0. Have you been using the FSA to pay for things this year?
posted by oneear at 10:53 AM on October 18, 2022

Response by poster: Thanks, this makes sense. The answer is that I have a fever and could not do math. I have not yet contributed the full $1500 for the year, although I have spent it down.
posted by twelve cent archie at 11:11 AM on October 18, 2022 [10 favorites]