Compliance FYI: IRS Announces 2018 Health FSA Limits

Compliance, Employee Benefits

On Thursday, October 19, 2017, the Internal Revenue Service (IRS) released Revenue Procedure 2017-58, which officially raises the maximum Health Flexible Spending Account (FSA) contribution limit to $2,650 per calendar year beginning in 2018. The Health FSA contribution limit is the only limit that was increased for the coming year.

This means that starting on January 1, 2018, the contribution limits for FSAs are:

Dependent Care$5,000$5,000
Transportation (Parking)$255/month$260/month
Transportation (Transit)$255/month$260/month

Key Takeaway

The increase goes into effect on January 1, but it is important to remember that organizations are not required to raise the contribution limit. Organizations with January 1 renewal dates, who want to raise the limit, should contact your M3 Account Team or the administrator of their Flexible Spending Account plan to determine how to move forward. There may still be time to increase the maximum contribution to your plan to adjust for the new legal threshold.

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