On Thursday, October 9, 2025, the Internal Revenue Service (IRS) released Revenue Procedure 2025-32, which officially increased the maximum Health Flexible Spending Account (FSA) contribution limit to $3,400 for calendar year 2026. The allowable amount of carry-over for FSA plans that have adopted a carry-over provision has been increased to $680 effective for the 2026 calendar year.
Contribution limits effective January 1, 2026 are:
| Type | 2025 | 2026 |
|---|---|---|
| Health FSA | $3,300 | $3,400 |
| Dependent Care | $5,000 | $7,500 |
| Transportation (Parking) | $325/month | $340/month |
| Transportation (Transit) | $325/month | $340/month |
Yes/And: Our Take
Yes, FSA limits are increasing, and that doesn’t mean every organization needs to raise them. Organizations who want to raise their FSA limit should contact their M3 Client Executive, or the administrator of their Flexible Spending Account plan, to determine how to move forward.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
