The IRS released Revenue Procedure 2024-40 announcing the adjusted contribution limits for health flexible spending accounts (Health FSAs), among other limits, for the 2025 calendar year.

The 2025 limits, as compared to the 2024 limits, are outlined below:

20252024
Health FSA$3,300$3,200
Maximum Health FSA Carryover Amount$660$640
Dependent Care FSA$5,000$5,000
Qualified Commuter/Parking Benefits$325$315
Adoption Assistance Tax Credit$17,280$16,810

In addition, the annual changes to the Affordable Care Act (ACA) maximum out-of-pocket limits were released earlier this year by the Department of Health and Human Services (HHS) in the Notice of Benefit and Payment Parameters, and are shown below:

20252024
ACA Maximum Out-of-Pocket Limit$9,200 (single)/
$18,400 (family)
$9,450 (single)/
$18,900 (family)

As a reminder, the 2025 limits released earlier this year in IRS Revenue Procedure 2024-25 for health savings accounts (HSAs) and high deductible health plans (HDHPs) are provided in our blog, Sequoia Foreword: 2024 HSA & HDHP Limits Announced.

Employer Action Item

  • Employers should ensure their systems, plan documents, and enrollment materials are updated with the 2025 limits.
  • Employers should notify their employees of the new 2025 limits.

Additional Resources

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog. © 2024 Sequoia Consulting Group. All Rights Reserved.

Tina Read — Tina is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Tina enjoys being with family, cooking, reading, and playing sports.