News

The Internal Revenue Service (IRS) recently released Revenue Procedure 2025-32, which increases the health flexible spending account (FSA) salary reduction contribution limit to $3,400 for plan years beginning in 2026, an increase of $100 from 2025. Thus, for health FSAs with a carryover feature, the maximum carryover amount is $680 (20% of the $3,400 salary reduction limit) for plan years beginning in 2026. When carrying over funds from 2025 to 2026, 20% of the $3,300 salary reduction limit for 2025 is $660.

The Revenue Procedure also contains the cost-of-living adjustments that apply to dollar limitations in certain other sections of the Internal Revenue Code.

Additional information on the topics below is available within our full alert.
•    Qualified Commuter Parking and Mass Transit Pass Monthly Limit
•    ACA Reporting Penalties (Forms 1094-B, 1095-B, 1094-C, 1095-C)
•    Adoption Assistance Tax Credit Increase
•    Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Increase
•    Reminder: 2026 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

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