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JCT: FSA Contribution Cap A Money Maker

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Limiting workers to $2,500 in flexible spending account contributions per year could generate about $13 billion in new tax revenue over a 10-year period, according to Joint Committee on Taxation analysts.

The analysts have published that figure in a table providing estimates of the effects of the “revenue provisions” in H.R. 3962, the Affordable Health Care For America Act bill.

The biggest proposed revenue raiser would be a 5.4% surtax on the incomes of individuals earning more than $500,000 per year and couples earning more than $1 million per year.

Bill drafters also hope to raise $26 billion by repealing “implementation of [the] worldwide interest allocation,” a regulatory change that would affect big companies’ tax returns.

Another H.R. 3962 provision would apply the same “medical expense definition” that governs itemized deductions to flexible spending accounts and other personal health accounts. That provision could raise $5 billion over 10 years, the CBO says.