FSA money has no impact on your AGI. The funds that went into the account were not reported as income to you on your W2 and the money (distributions) you take can theoretically only be used to pay for qualified healthcare costs. You do not get to take an itemized deduction for expenses paid with FSA funds. So the FSA money just never hits your 1040 tax return in any place, unless you somehow paid for non-qualified expenses.