Tax Facts

3515 / What is a flexible spending arrangement?

Updated: October 23, 2026 at 06:50 PM
A flexible spending arrangement (FSA) is a program under IRC Section 125 under which incurred expenses may be reimbursed. This benefit may be provided as a stand-alone plan or as part of a traditional cafeteria plan. The most common types are health FSAs ( Q 3516) and dependent care assistance FSAs ( Q 3517).


In order for the coverage provided through an FSA to qualify for the exclusion from income under IRC Sections 105 and 106 or IRC Section 129 (for dependent care FSAs, see Q 3625), the FSA must meet the requirements set forth in Q 3516 and Q 3517.


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