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Section 125

Made possible by Section 125 of the IRS code, these plans help both employers and employees save tax money. Employers can save taxes on their group benefit plans while offering employees a way to save taxes on money spent out-of-pocket for medical expenses and dependent care.

Section 125 includes Premium Only Plans, Flexible Spending Accounts, Dependent Child Care and Cafeteria Plans. Money allocated to a Section 125 Plan is subtracted from the employee’s taxable income, and it’s free from employer-paid Social Security and Unemployment taxes.