The Internal Revenue Service (IRS) published Revenue Procedure 2024-40 on October 22, 2024. The Revenue Procedure includes the inflation-adjusted 2025 contribution limits for certain employee benefit programs. Below is a summary of some of those contribution limit adjustments.

Health Flexible Spending Accounts (Health FSAs)

• The payroll deduction contribution limit for 2025 plan years is $3,300 (an increase of $100).
• Up to $660 of unused funds can be carried over from the 2025 plan year to the 2026 plan year (an increase of $20). Carryover is an optional feature that employers can have with the Health FSA they offer to their employers.
 

Dependent Care Flexible Spending Accounts (Dependent Care FSAs)

• The maximum contribution limit is $5,000 for the 2025 calendar year (or $2,500 if married and filing taxes separately). This contribution limit is not inflation adjusted.
 

Commuter Programs

• The monthly contribution limit for mass transit is $325 (an increase of $10).
• The monthly contribution limit for qualified parking is $325 (an increase of $10).
 

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)

• The maximum annual contribution for single-only coverage for 2025 plan years is $6,350 (an increase of $200).
• The maximum annual contribution for family coverage for 2025 plan years is $12,800 (an increase of $350).

Earlier this year, the IRS issued a separate Revenue Procedure with the limits for High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs). To see those limits, please click here.