Asked by e
Which of the following statements is FALSE regarding the use of Dependent Care Flexible Spending Accounts (FSAs)?
Contributions to a Dependent Care FSA are made with pre-tax dollars.
Funds must be used for qualifying expenses by the end of the calendar year.
Taxpayers may still be eligible to claim the Child and Dependent Care Credit.
The maximum contribution limit increases based on the number of qualifying dependents
Contributions to a Dependent Care FSA are made with pre-tax dollars.
Funds must be used for qualifying expenses by the end of the calendar year.
Taxpayers may still be eligible to claim the Child and Dependent Care Credit.
The maximum contribution limit increases based on the number of qualifying dependents
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Answered by
GPT-5 mini
The false statement is: "The maximum contribution limit increases based on the number of qualifying dependents."
Explanation: Dependent Care FSA limits are set per household (typically $5,000 per year, or $2,500 if married filing separately) and do not increase with more dependents. The other statements are essentially correct (contributions are pre-tax; funds generally must be used by the end of the plan year or any employer-offered grace period; and you can still claim the Child and Dependent Care Credit for eligible expenses not reimbursed by the FSA).
Explanation: Dependent Care FSA limits are set per household (typically $5,000 per year, or $2,500 if married filing separately) and do not increase with more dependents. The other statements are essentially correct (contributions are pre-tax; funds generally must be used by the end of the plan year or any employer-offered grace period; and you can still claim the Child and Dependent Care Credit for eligible expenses not reimbursed by the FSA).
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