The open enrollment tax checklist: FSAs, HSAs, and the new Trump account benefit

Benefit elections are pre-tax for both income tax and FICA, so a dollar elected at open enrollment is worth more than a dollar of most deductions.

The dependent care FSA rises to $7,500

Starting in 2026, the dependent care FSA limit rose to $7,500 per household ($3,750 if married filing separately) from $5,000, where it had been for decades. Your employer's plan has to adopt the higher limit, however. The FSA covers daycare, preschool, before- and after-school programs, and day camps for children under 13. At a combined 30% marginal rate including FICA, contributing the maximum saves about $2,250.

If you're also eligible for the child and dependent care credit, the FSA usually comes out ahead from the 22% bracket up. In the 12% bracket with two or more children, the credit often does better. It is worth 35% of $6,000, or $2,100, versus about $1,475 of federal tax and FICA saved on a $7,500 FSA. You can't use the same expenses for both, because every FSA dollar reduces the expenses eligible for the credit.

Health FSA: $3,400

The 2026 health FSA limit is $3,400. Plans may allow a carryover of a portion of unused funds or a grace period. If you elect an HSA-eligible plan, you can usually only use a limited-purpose FSA for dental and vision.

Key numbers: dependent care FSA $7,500 · health FSA $3,400 · HSA $4,400 / $8,750 · employer Trump account contribution up to $2,500 per employee tax-free.

HSA plan versus PPO

Estimate a typical year and a bad year under each option, including premiums, deductibles, the employer HSA deposit, and your tax savings on contributions. Healthy households often come out ahead with the HSA plan even in a bad year, and the HSA balance is yours to keep and invest. See our HSA guide.

Trump accounts for children

Trump accounts are a new tax-advantaged account for children, with contributions allowed beginning July 4, 2026. Three points matter most for employees.

• The Treasury deposits $1,000 for eligible children born in 2025 through 2028 who are U.S. citizens with a Social Security number. You have to claim it on Form 4547, even if your child was automatically enrolled.
• Contributions are capped at $5,000 a year per child, indexed after 2027, and employer contributions count toward that cap along with family money.
• Employers can contribute up to $2,500 a year per employee through a written program, and the amount is excluded from the employee's income. That limit applies per employee in total, not per child.

If your employer adds this benefit, enroll, since it is tax-free compensation.

Other elections to review

• Group term life coverage above $50,000 creates imputed income, so compare it with individual term coverage.
• Commuter benefits for transit and parking are pre-tax up to the monthly limits.
• For disability insurance, paying premiums with after-tax dollars makes the benefits tax-free if you ever need them.

Common mistakes

1. Electing a dependent care FSA for a child who turns 13 early in the year.
2. Combining a general health FSA with an HSA, which disqualifies HSA contributions.
3. Forgetting to re-elect FSAs, most of which don't roll over automatically.

How Summer Associates helps

Summer Associates reviews your benefits menu with your household numbers and shows which elections come out ahead, including coordination with a spouse's plan.

This guide is general education based on federal and Connecticut law as of 2026-11-15. State rules differ and facts matter. Before acting, get advice for your situation from Summer Associates or another qualified advisor.