IRS Increases Flexible Spending and Transportation Benefit Plan Limits in 2022: Two Short Graphs


The Internal Revenue Service (IRS) recently announced increases for 2022 to the health Flexible Spending Account (FSA) contribution limit and the transportation benefit limit. This alert complements our alert of November 11, 2021, “2022 Pension and Benefits Plan Caps Explained in 5 Short Tables.”

This alert outlines updated Flexible Spending Account and Transportation Benefits limits for 2022, compared to 2021 limits, in the tables below. Also below are the FSA limits for dependents for 2022.

Flexible spending account limit

2021

2022

Health ASF

$2,750

Maximum carryover to next plan year $550

$2,850

Maximum carryover to next plan year $570

FSA Dependent Care*

Family: $10,500**

Married, filing separately $5,250

Family: $5,000**

Married, separate filing

$2,500

* Section 9632 of the American Rescue Plan Act of 2021, signed into law on March 11, 2021, increased the FSA exclusion for dependents for any tax year beginning after December 31, 2020 and before January 1, 2022.

** Married and filing a joint statement or single parent statement

Benefit limit for transit and parking 2021 2022

Transportation/parking

$270/month

$280/month

Actions for employers

  • Update all plan documents that identify annual limits.
  • Update member communications, as limits may impact important benefit choices for 2022.
  • Update human resource information systems (HRIS) and/or payroll systems with new limitations for administration, record keeping and tax reporting.
  • Ensure that all vendor data feeds are updated to comply with the new limits.
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