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April 15, 2025
Question

I had a limited purpose FSA and could not spend any of the money. It supposedly went back to my employer. Do I report this as income or can I deduct this from my gross?

  • April 15, 2025
  • 1 reply
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I paid out of my paycheck as pre tax dollars. 653 dollars. I never received the money, so can I deduct this from my gross?

1 reply

April 15, 2025

No, you just lose it.  It's not income because it was not included in your wages (you agreed to a voluntary salary reduction, with the money being contributed to the FSA on your behalf).  And there's no deduction because you can't deduct something from your income that was never included in your income in the first place.

 

FSAs are use-it-or-lose-it by design.  That's how they work.