IRS Announces Health FSA Limits for 2022

Compliance, Employee Benefits

On Wednesday, November 10, 2021 the Internal Revenue Service (IRS) released Revenue Procedure 2021-45, which officially increased the maximum Health Flexible Spending Account (FSA) contribution limit to $2,850 for calendar year 2022. The allowable amount of carry-over for FSA plans that have adopted a carry-over provision has been increased to $570 effective for the 2022 year.

Health FSA contribution limits effective January 1, 2022 are:

Health FSA$2,750 $2,850
Dependent Care$5,000 $5,000
Transportation (Parking) $270/month $280/month
Transportation (Transit) $270/month $280/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 their FSA limit should contact their 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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