calendar year. (B) Maximum reduction The amount of a reduction under subparagraph (A) for a taxable year shall not exceed $5,000. (2) Eligible employee For purposes of this subsection— (A) In general (i) Eligible employee The term eligible employee means, with respect to a flexible giving account, any employee who is not a highly compensated or key employee and who is eligible to participate in the arrangement. (ii) Highly compensated employee The term highly compensated employee has the meaning given such term by section 414(q). (iii) Key employee The term key employee has the meaning given such term by section 416(i). (B) Certain employees may be excluded For purposes of subparagraph (A), an employer may elect to exclude under the arrangement described in paragraph (1) any employee who— (i) has not attained the age of 21 before the close of a plan year of the arrangement, (ii) has less than 1 year of service with the employer as of any day during the plan year, and (iii) is described in section 410(b)(3)(C) (relating to nonresident aliens working outside the United States). (C) Shorter service period