Claiming the tax benefits of your FSA is built into how it works. Pre-tax funds are deducted from your paycheck, which lowers your total income tax for the year. Depending on your annual salary, this can potentially bump you down a tax bracket.
Do I need to report anything on my personal income tax return?
No. FSA contributions are not subject to federal income tax, Social Security tax, or Medicare tax so you and your employer are not required to report it to the IRS.
You will usually not see the amount reported in your W-2 form, however, your employer may choose to include it for informational purposes only.
Tax treatment applies to all FSAs
All FSA programs receive the same tax treatment. This includes:
Dependent care FSA (DC-FSA)
Dental & vision or limited-purpose (LP-FSA)
General health FSA (FSA)
Note: While no reporting is required for FSA contributions, there are restrictions to spending and 'double-dipping'.