Congress Gave You a Raise. HR Kept It.
The Shrinking Bag
In 1986, $5,000 covered a full year of daycare. Congress set that as the cap on your dependent care FSA. Tax-free. Then they walked away.
For forty years, that number never permanently moved. Not once. Prices tripled. Adjust that 1986 cap for inflation and it should be $15,200 today. But the form still says $5,000. Same label on the bag. The bag just kept shrinking.
Today, five grand covers four months of daycare.
The Fix
In July 2025, Congress bumped the cap to $7,500. First permanent raise in four decades. Headlines called it a win for working families.
Sure.
Here's the part they skip. The money doesn't flow from Congress to your paycheck. It flows from Congress to your employer's benefits plan. The document that governs your FSA. Your employer has to amend that document to let the new number through. They can keep it at $5,000. They can split the difference at $6,000. Their call.
Most haven't amended. This isn't laziness.
EXTRA INCOME (government backed)
Hey, quick question.
Could you use a little extra income every month?
Not from a second job.
Not from selling stuff online.
From the government.
(backed by law. secured by tax revenue.)
A guy named Jay started collecting these with just $72 in his bank account.
Now checks that show up like clockwork.
One covers groceries. One covers insurance. A couple more cover the mortgage.
You don't need experience.
You don't need a lot of money.
You don't need to do anything complicated.
Just follow a simple step-by-step process from any computer or smartphone.
P.S. The banks have been hiding this program since 1936. Now there's a backdoor. But it won't be open forever.
The Broken Scale
Here's the lock. The IRS applies the 55% Average Benefits Test. Picture a seesaw. On one side, the average FSA dollars used by highly compensated employees. That's anyone who pulled more than $160,000 last year. On the other side, the average used by everyone else.
The everyone-else side has to weigh at least 55% of the executive side. Fall short, the test fails.
Now watch what happens when the cap jumps to $7,500.
Executives max it out. They always do. Their side gets heavier. Rank-and-file workers? Lots of them can't swing $7,500. Their side stays light. The seesaw tips. The test fails.
When the test fails, the IRS doesn't punish the company. It punishes the executives. If rank-and-file workers average $2,100 in the plan, every executive dollar above the passing threshold turns taxable. The excess gets clawed back on their W-2.
So HR does the math. Keep the cap at $5,000 for everyone. The seesaw stays balanced. Executive tax breaks stay safe. The raise Congress passed never reaches you.
I mean. The logic is clean.
The Second Squeeze
It gets better.
The same bill that raised the FSA cap also sweetened the child and dependent care tax credit. Made it generous enough that for lower-income families, the credit is now a better deal than the FSA. So they drop out.
Rational move for them. Poison for the test.
Fewer rank-and-file workers in the FSA pool means their side of the seesaw gets even lighter. The ratio gets worse. Congress built a fix that sabotages itself.
The rule designed to stop executives from hogging the benefit is now the reason HR won't give you the benefit at all.
Employee: Congress raised my cap.
HR: We know.
Employee: So I can use it?
HR: No.
The gap between $5,000 and $7,500 is $2,500 in tax-free dollars. At a typical marginal rate, that's about $866 a year sitting in a pipe that HR welded shut.
WASHINGTON JUST PUT YOUR RETIREMENT MONEY IN THE CROSSHAIRS
Your IRA.
Your 401(k).
Your bank accounts.
Your life savings.
Washington knows exactly where every dollar is.
And now the Department of Justice has made an argument that should send a chill down the spine of every American approaching retirement:
Cash isn't legally property.
That's right.
You could spend 40 years working...
40 years saving...
40 years sacrificing...
Only to discover that Washington may not view YOUR money the way YOU do.
And if the government doesn't consider your cash property...
How untouchable is your retirement really?
History has taught us an ugly lesson:
When governments get into financial trouble...
Ordinary citizens can pay the price.
Rules change.
Access gets restricted.
And yesterday's assumptions can disappear overnight.
Yet millions of Americans still have virtually their entire retirement sitting inside a financial system they don't control.
You don't have to make that mistake.
Our FREE information kit reveals 3 strategies you can consider starting today to help shield your savings and take back more control over your financial future.
You spent decades building your retirement. Don't leave its future entirely in Washington's hands.
The Maybe
I dunno. There's a crack in the wall.
This August, the IRS proposed new testing rules for the first time in 45 years. The big change: calculate the ratio using only employees who actually participate. Not everyone who's eligible. That would lighten the executive side and give more plans a shot at passing.
Proposed. Not final. First proposed regulations on a rule written in 1981.
Same Bag, New Label
One more thing. The $7,500 isn't tied to inflation. Congress set a new number. Then they walked away. Again.
In 2026, $7,500 covers half a year of daycare. Give it twenty years. See what it buys.
Same shrinking bag. New number on the label.
