On Thursday, November 5, 2026, the Internal Revenue Service (IRS) released Revenue Procedure 2026-35, which officially increased the maximum Health Flexible Spending Account (FSA) contribution limit to $3,500 for calendar year 2027. The allowable amount of carry-over for FSA plans that have adopted a carry-over provision has been increased to $700 effective for the 2027 calendar year.
Contribution limits effective January 1, 2027:
| Type | 2026 | 2027 |
| Health FSA | $3,400 | $3,500 |
| Dependent Care | $7,500 | $7,500 |
| Transportation (Parking) | $340/month | $350/month |
| Transportation (Transit) | $340/month | $350/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 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. |
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.
