2023 Limits Increase for FSA, Transit, Adoption

The IRS published Revenue Procedure 2022-38 on October 18, 2022, detailing 2023 limit increases for Flexible Spending Accounts (FSAs), Transit, and Adoption benefits.

FSA Limit for 2023

The maximum annual contribution for Health FSAs is rising from $2,850 in 2022 to $3,050 in 2023.

Dependent Care FSA limits remain $5,000 for married couples filing jointly and head of household. The limit for a married couple filing separately remains at $2,500.

FSA Carryover Increase

The annual FSA Carryover limit is indexed to 20% of the annual contribution limit. As the FSA limit is increasing to $3,050 for 2023, the annual FSA Carryover limit will increase from $570 to $610.

Transit Limits Increase

Monthly qualified parking benefits and qualified transportation fringe benefits will each increase from $280 per month in 2022 to $300 per month for 2023 plans.

Adoption Assistance Increase

Adoption Assistance sponsored by employers had a limit of $14,890 in 2022. For 2023, that limit will increase to $15,950.

The IRS announced 2023 HSA limits earlier this year. Information on those is available here.

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