The maximum contribution amount for employees participating in a flexible spending account will increase in 2024, according to the Internal Revenue Service.
Starting in 2024, employees can contribute up to $3,200 tax-free to an FSA through payroll deduction, an increase of $150 from this year. The account can be used to pay for medical expenses not covered by other health plans – including co-pays, deductibles and a variety of medical products, as well as eye and dental care – and contributions are not subject to federal income tax, Social Security tax or Medicare tax.
Households with separate employer plans can contribute up to $6,400 a year. Self-employed individuals are not eligible.
For FSAs that allow carryover of unused amounts, the maximum for 2024 to 2025 is $640, up from $610 that can be carried over from 2023 to 2024.
You can see a list of allowed FSA items here.
