The Internal Revenue Service (IRS) has announced that the contribution limit for health flexible spending accounts (FSAs) for 2024 is $3,200. This is an increase of $150 from the 2023 limit.
Health FSAs allow employees to set aside pre-tax dollars from their paychecks to pay for qualified medical expenses. This can include things like doctor’s visits, prescriptions, dental care, and vision care.
The dependent care FSA maximum annual contribution limit is not adjusted for inflation and will not change in 2024. It remains $5,000 per household for single taxpayers and married couples filing jointly, or $2,500 for married people filing separately. Married couples have a combined $5,000 limit.
As open enrollment may have begun for calendar year plans, employers may need to review and update their open enrollment materials and communications to employees regarding the FSA. It may also be necessary for employers to review and update their payroll systems and employee handbook policy if said policy specifies annual FSA limits.