IRS Announces 2024 FSA Limits

On November 10, via Rev. Proc. 2023-34, the IRS released its 2024 annual contribution limits for Flexible Spending Accounts (FSAs), Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), adoption assistance, and qualified transportation plans.

FSA Limits for 2024

The annual contribution limit for FSAs has been raised to $3,200, compared to $3,050 in 2023. For plans that include the Carryover option, that limit has been raised to $640, up from $610 this year.

QSEHRA Limits for 2024

The annual maximum combined total that an employer can provide per employee in payments and reimbursements under a QSEHRA plan will increase to $6,150 for self-only coverage and $12,450 for family coverage, compared to $5,850 and $11,800 in 2023.

Adoption Assistance Limits for 2024

For 2024, the maximum adoption assistance limit increases to $16,810. That’s up from $15,950 in 2023. Employer assistance remains completely excludable from an employee’s gross income up to a modified adjusted gross income of $252,150. Above that income level, the tax-free provision gradually phases out.

Transit Limits for 2024

The monthly limit for qualified transit expenses will rise to $315. The monthly limit for qualified parking will also rise to $315. Both were set at $300 in 2023.

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