Most dependent care FSAs are structured so eligible employees fund their accounts with pre-tax payroll deductions through a Code Section 125 cafeteria plan. Employers may also contribute to employees’ dependent care FSAs, subject to certain nondiscrimination requirements. Effective Jan. 1, 2026, the maximum annual contribution limit for dependent care FSAs increases to $7,500, or $3,750 for married individuals filing separate tax returns (up from $5,000 and $2,500, respectively, for prior years).
