Flexible Spending Arrangements (FSAs)

	Health FSA	Dependent Care FSA
What is it?	Tax-advantaged employer plan that reimburses employee medical expenses.	Tax-advantaged employer plan that reimburses employees for dependent care expenses.
What are some advantages to it?	No federal income tax or employment tax on contributions. Tax-free distributions for qualified medical expenses. Employee can draw on the account for medical expenses before funds are placed in it.	No federal income tax or employment tax on contributions. Tax-free distributions for qualified dependent care expenses.
What expenses can it be used to pay?	Expenses specified by the plan that generally qualify for the medical and dental expenses deduction, but not traditional health insurance premiums.	Expenses that generally qualified for the child and dependent care expenses deduction, including nursery school and preschool expenses.

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