IRS Announces Health FSA Limits for 2024

Compliance, Employee Benefits

On Thursday, November 9, 2023, the Internal Revenue Service (IRS) released Revenue Procedure 2023-34, which officially increased the maximum Health Flexible Spending Account (FSA) contribution limit to $3,200 for calendar year 2024. The allowable amount of carry-over for FSA plans that have adopted a carry-over provision has been increased to $640 effective for the 2024 year.

Contribution limits effective January 1, 2024 are:

Health FSA$3,050$3,200
Dependent Care$5,000$5,000
Transportation (Parking)$300/month$315/month
Transportation (Transit)$300/month$315/month

Key Takeaways

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.

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.

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