IQVIA Benefits Handbook
TAX TREATMENT
There are some important tax issues that you should be aware of when using IQVIA FSAs, including how pre-tax contributions can save you money and details about the dependent care tax credit.
Pre-Tax Contributions
Your contributions and reimbursements are not subject to federal, Social Security or Medicare and in most cases, state and local taxes. By paying for your health and dependent care expenses with pre-tax money, your take-home pay is more than if you paid the expenses after taxes.
An Example
You could save $2,592 each year if:
  • You and your spouse both work and together make $90,000 per year.
  • You have one dependent child, and you file a joint return.
  • You contribute $2,400 to a Health Care FSA.
  • You contribute $5,000 to the Dependent Care FSA to pay for care while your spouse works.
Health Care and Dependent Care Expenses
 
With the FSAs
Without the FSAs
Gross Monthly Salary
$7,500
$7,500
Health Care FSA
– $200
$0
Dependent Care FSA
– $416
$0
Taxable Income
$6,884
$7,500
Taxes
– $2,409
– $2,625
Take-home Pay after Taxes
$4,475
$4,875
After-tax Health Care Expenses
$0
– $200
After-tax Dependent Care expenses
$0
– $416
Monthly Take-home Pay
$4,475
$4,259
Estimated Tax Savings*
$216/month,
or $2,592/year
 
* The tax savings shown here are general estimates only. Your actual taxes may be more or less, as tax rates may vary based on your location and your tax filing status.
Tip: Take Advantage of Tax Savings
If your family's adjusted gross income is $24,000 or more, your tax advantage is usually greater with the Dependent Care FSA.
Dependent Care FSA vs. Dependent Care Tax Credit
Using the Dependent Care FSA will affect the amount you can deduct for the federal dependent care tax credit. You may not take an income tax credit on your tax return and get reimbursed from your Dependent Care FSA for the same expenses.
You may want to consult a financial advisor regarding your individual situation.