by admin | Feb 9, 2026 | Blog
Adoption is a life‑changing journey, but it also comes with significant financial challenges. While the federal adoption tax credit offers meaningful relief, many employees still struggle to cover upfront expenses or fully benefit from the credit. For employers—especially small companies working with tight benefits budgets—the question often becomes: Should we offer adoption assistance benefits when a tax credit already exists?
The short answer: yes. And here’s why.
1. Adoption Expenses Often Exceed the Federal Tax Credit
For 2026, the federal adoption tax credit allows up to $17,670 per child, with up to $5,120 refundable. While helpful, adoption costs can easily surpass these limits. Private domestic, agency, and international adoptions often range from $20,000 to over $50,000.
Employer adoption assistance can help fill this financial gap, reducing out‑of‑pocket expenses for employees and making adoption more accessible.
2. Employees Typically Use the Tax Credit First—But It Doesn’t Replace Employer Support
Because employer‑provided adoption benefits are treated as taxable wages for FICA purposes, most employees will understandably use the tax credit first. The credit usually offers greater financial value upfront.
However, the credit alone rarely covers all expenses—and employees can use both the tax credit and employer reimbursement, as long as it’s not for the same dollar of expense.
Employer benefits remain a critical supplement.
3. Lower‑Income Employees Often Can’t Use the Full Tax Credit
Even with a partially refundable credit, lower-income employees may not have enough tax liability to use the credit’s full value. While unused credits can be carried forward for up to five years, not everyone benefits fully before credits expire.
Employer-provided assistance can help bridge the gap, giving employees meaningful financial support regardless of their tax liability.
4. Employer Reimbursements Improve Employee Cash Flow
Unlike the tax credit—which can only be claimed after finalizing expenses—adoption assistance benefits can provide immediate financial relief. Whether through direct payments or quick reimbursements, employer support can help employees:
- Avoid costly personal loans
- Manage sudden or large adoption expenses
- Reduce financial stress during an emotionally intense process
For many families, improving cash flow is just as valuable as reducing the total cost of adoption.
5. Employers Can Offer Adoption Benefits With Minimal Cost
One major misconception is that offering adoption benefits requires a large employer contribution. In reality, a qualified adoption assistance program can be established with little or no employer funding.
Here’s how:
- Employees can use pre‑tax salary reductions to fund adoption expenses through a cafeteria plan.
- Special‑needs adoptions receive unique tax treatment—employees may qualify for a full income tax exclusion simply because an employer has a qualifying program in place, even if the employer contributes nothing.
This means even small companies can provide meaningful value at minimal cost.
6. Adoption Benefits Strengthen Recruitment, Retention, and Culture
Today’s workforce cares deeply about family-friendly policies. Adoption assistance benefits can:
- Set your company apart from competitors
- Support diversity in family-building paths
- Foster a compassionate, inclusive culture
- Appeal to employees who value equity between biological and adoptive parents
Since most employers already subsidize the cost of childbirth through health insurance, offering adoption benefits promotes fairness and signals a genuine commitment to employee well-being.
Even with a federal tax credit in place, employer-provided adoption assistance benefits offer unique financial, emotional, and practical support that the tax credit alone cannot. For many companies—large and small—these benefits are a powerful way to demonstrate values, strengthen your employer brand, and support employees as they grow their families.
Source: Thomson Reuters
by admin | Jan 12, 2026 | Blog
Flu season is in full swing, and being prepared can make all the difference. The best part? You can use your FSA or HSA funds to stock up on these health essentials without spending extra out-of-pocket.
Here are the top 5 FSA/HSA-approved products to keep you healthy this season:
1. Thermometers
A reliable thermometer is a must for tracking fevers. Digital and smart thermometers are FSA/HSA eligible and help you monitor symptoms accurately.
🔗 Buy a FSA‑eligible thermometer
2. Over-the-Counter Medications
Pain relievers, fever reducers, and cough/cold medicines are often eligible with a prescription. Check your FSA/HSA store for flu symptom relief bundles.
🔗 Shop FSA‑eligible cold & flu meds
3. Humidifiers
Combat dry air and soothe congestion with a humidifier. Many models qualify for FSA/HSA coverage.
🔗 See eligible humidifiers
4. Saline Nasal Sprays
Affordable and effective, saline sprays help relieve nasal congestion and keep your sinuses clear.
🔗 Buy FSA/HSA‑eligible saline spray
5. Face Masks & Hand Sanitizers
Preventing the spread of germs is just as important as treating symptoms. Stock up on masks and sanitizers—both are typically covered.
🔗 Learn about mask & sanitizer eligibility
Why Use FSA/HSA Funds?
Using your tax-free dollars for flu season essentials is a smart way to save money while staying healthy. Don’t forget to check your FSA/HSA store for seasonal deals before your plan year ends!
For a full list of all eligible FSA items click here.
by admin | Jan 8, 2026 | Blog
The IRS has announced new mileage rates for 2026. If you use your personal car for work, medical, moving, or charitable The IRS has announced new mileage rates for 2026. If you use your personal car for work, medical appointments, moving, or charitable activities, these rates help you calculate deductions or reimbursements without tracking every expense.
Updated Rates for 2026
- Business: 72.5¢ per mile (up from 70¢ in 2025)
- Medical & Moving: 20.5¢ per mile (down from 21¢)
- Charitable: 14¢ per mile (same as last year)
Business mileage includes both fixed and variable costs like depreciation and fuel. Medical and moving only cover variable costs such as gas and oil.
Vehicle Value Limit
If your employer provides a car for personal use, the IRS sets a maximum value for certain rules. In 2026, that limit is $61,700. This also applies to reimbursement plans like FAVR, which base payments on local driving costs.
Why It Matters:
Using the correct mileage rate ensures your deductions or reimbursements are accurate and compliant. Keep these numbers in mind for your 2026 reporting.
by admin | Dec 11, 2025 | Blog
The IRS has shared new details about Trump Accounts (TAs)—special savings accounts for kids under 18 created by a law passed in July 2025. These accounts help parents and employers save for a child’s future.
What Are Trump Accounts?
- A TA is like a retirement account, but for minors.
- Parents or guardians can open one for their child.
- Contributions can come from parents, employers, or even government programs.
Employer Contributions
Starting July 4, 2026:
- Employers can contribute up to $2,500 per year to a child’s TA.
- This money is tax-free for the employee.
- The $2,500 limit applies per employee, not per child. So if you have two kids, the total is still $2,500.
Cafeteria Plans
- Employers can offer TA contributions through cafeteria plans (benefit plans where employees choose options).
- Employees can use salary reductions to fund their child’s TA.
- Important: Employees cannot use salary reductions for their own TA—only for their child’s.
What Employers Need to Do
- Tell the TA trustee that the contribution is from a TACP (Trump Account Contribution Program).
- Make sure contributions don’t go over the $2,500 limit.
What’s Next?
The IRS will release more detailed rules soon about:
- How cafeteria plans and TACPs work together.
- Reporting requirements for employers.
Bottom Line:
Trump Accounts give families a new way to save for kids’ futures, and employers can help by contributing tax-free funds. Businesses should start planning now for the July 2026 rollout.
Source: Thompson Reuters
by admin | Dec 11, 2025 | Blog
Big news! The IRS just explained how the One Big Beautiful Bill Act (OBBBA) changes Health Savings Account (HSA) rules. Here’s what it means in plain language:
✅ 1. Telehealth Gets the Green Light
- If your high-deductible health plan (HDHP) covered telehealth before July 4, 2025, you can still put money into your HSA for the whole year.
- Only services on the official Medicare telehealth list count. In-person visits, equipment, or prescriptions don’t qualify unless listed.
✅ 2. Bronze & Catastrophic Plans Count as HDHPs
- Starting in 2026, bronze and catastrophic plans from ACA exchanges will qualify as HDHPs—even if they don’t meet the usual deductible rules.
- Employers can use ICHRAs to help employees buy these plans.
✅ 3. Direct Primary Care (DPCSA) Rules
- Monthly fee limits: $150 per person or $300 per family.
- Fees must be fixed and regular—no surprise bills for members.
- HDHPs can’t count these fees toward deductibles or offer extra primary care before the deductible.
✅ 4. Using Your HSA for DPCSA Fees
- You can use HSA money for DPCSA fees if they only cover primary care and follow IRS rules.
- If fees go over the monthly limit, you can’t add money to your HSA during that time.
- Employer-paid fees can’t be reimbursed from your HSA.
What Should You Do?
- Check your telehealth coverage.
- Update plan info for bronze/catastrophic HDHP status.
- Make sure DPCSA agreements follow the new limits.
- Share these changes with employees.
Bottom Line: These updates make HSAs more flexible for telehealth, ACA plans, and direct primary care—but you need to follow the IRS rules to stay eligible.
Source: Thomson Reuters
by admin | Dec 5, 2025 | Blog
The end of the year is almost here—can you believe it? Before you dive into holiday plans, take a quick peek at your Flexible Spending Account (FSA) or Health Savings Account (HSA). You might have money sitting there that could vanish if you don’t use it soon!
Why You Should Check
- FSA funds usually expire: Most FSAs follow the “use it or lose it” rule. If you don’t spend the money by December 31, it could go away. Some plans offer a grace period or a small rollover, but not all do.
- HSA funds roll over: HSAs are more forgiving, but it’s still smart to use what you can now—especially for tax savings and health needs.
What Can You Buy?
You’d be surprised at what counts! Eligible items include:
- Prescription meds and over-the-counter medicine
- Glasses, contacts, and eye exams
- Dental visits and orthodontics
- First-aid kits, sunscreen, and even period products
Top 5 FSA/HSA Buys
Here are some popular, eligible items to spend your funds on before the year ends:
- Sunscreen – Protect your skin year-round.
Shop Sunscreen at FSA Store
- Blood Pressure Monitor – Keep tabs on your health at home.
Shop BP Monitors at FSA Store
- First-Aid Kit – Be prepared for life’s little surprises.
Shop First Aid Kits at FSA Store
- Menstrual Care Products – Pads, tampons, and more are eligible.
Shop Menstrual Care at FSA Store
- Thermometers & Wellness Devices – Great for family health tracking.
Shop Thermometers at FSA Store
Quick Tip
Every plan is different, so log in to your account or call your benefits provider to confirm your deadline and what’s covered.
Don’t let your hard-earned dollars go to waste. Take five minutes today to check your balance and make the most of your benefits before the year ends!
Explore More Eligible Items at FSA Store by clicking here.
