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Reply to "Discrimination test for dependent care FSA?"
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[quote=Anonymous]Every year, DH puts $5k into his employer's dependent care FSA. Yesterday, he got an email from his HR dept. saying that they had done a discrimination audit of their FSA enrollments and that the "high earners" (those earning over $115k) were overly represented and cannot use the tax deferral. He will be getting a new W2 and we will have to pay taxes on that FSA money we had thought was deferred. I've never heard of this and his company said they hadn't had this happen before so they didn't warn any employees of the possibility. We usually get a refund, but I'm worried we will get killed on taxes now. Anyone have experience with this?[/quote]
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