FSA Contribution Limits: Current Year Amounts
Flexible Spending Account (FSA) contribution limits are set annually by the Internal Revenue Service and apply to employer-sponsored benefit plans governed under Internal Revenue Code Section 125. Understanding these limits is essential for employees making open-enrollment elections, because contributions exceeding statutory ceilings create tax compliance problems and because underutilization forfeits pre-tax dollars under the use-it-or-lose-it rule. This page covers the limit amounts for health care FSAs and dependent care FSAs, how those figures are determined, and the decision boundaries that determine which cap applies to a given enrollee.
Definition and scope
A Flexible Spending Account is a tax-advantaged benefit arrangement under IRC Section 125 (also called a cafeteria plan), allowing employees to set aside pre-tax dollars for qualified health or dependent care expenses. The IRS adjusts the contribution ceiling for health care FSAs each year based on cost-of-living calculations under IRC Section 415(d). The dependent care FSA limit is set by a separate statutory provision and has historically moved less frequently.
Two distinct FSA types carry separate ceilings:
- Health care FSA (HCFSA): Covers qualified medical, dental, and vision expenses as defined under IRS Publication 502.
- Dependent care FSA (DCFSA): Covers qualifying child and dependent care expenses as defined under IRS Publication 503.
A third variant — the limited-purpose FSA — restricts reimbursements to dental and vision expenses, enabling coordination with a Health Savings Account. Its contribution ceiling follows the same IRS-published limit as the standard health care FSA.
The full regulatory context for health savings accounts, including FSA rules, flows from Treasury Department regulations implementing IRC Section 125.
How it works
IRS limit-setting mechanism
The IRS announces revised FSA contribution limits each fall through a Revenue Procedure, typically covering the following plan year. For plan year 2024, IRS Revenue Procedure 2023-34 set the health care FSA limit at $3,200 per employee — an increase from the 2023 limit of $3,050 (IRS Rev. Proc. 2022-38). For plan year 2025, IRS Revenue Procedure 2024-40 set the health care FSA limit at $3,300.
The dependent care FSA limit is $5,000 per household (or $2,500 for married individuals filing separately), a figure established by IRC Section 129 and not subject to the same annual inflation adjustments that apply to health care FSAs.
Carryover and employer design
Employers may permit one of two plan-design options to moderate the forfeiture risk under the use-it-or-lose-it rule:
- A grace period of up to 2½ months after the plan year ends, during which unused funds may be spent.
- A carryover of up to $640 (for plan year 2024, per IRS Rev. Proc. 2023-34) or $660 (for plan year 2025, per IRS Rev. Proc. 2024-40) into the following plan year.
Employers cannot offer both options simultaneously. The carryover amount does not count against the subsequent year's contribution limit, but it does affect HSA eligibility if the employee transitions to an HSA-qualified plan.
For a broader comparison of how FSA rules sit alongside HSA and HRA frameworks, see the home resource index.
Common scenarios
Scenario 1: Single employee with predictable medical costs
An employee anticipating $2,400 in out-of-pocket dental and prescription costs elects the full $2,400. Because the 2025 statutory ceiling is $3,300, the election is within limits. The employer plan allows the $660 carryover, so unused balances up to $660 roll forward without penalty.
Scenario 2: Married couple, both employed
Each spouse may individually elect up to the IRS per-employee ceiling — $3,300 in 2025 — through their respective employer plans. Unlike HSA rules, the FSA ceiling is per-employee, not per-family. A household with both spouses enrolled could collectively contribute up to $6,600 in health care FSA dollars in 2025.
Scenario 3: Dependent care FSA with split filing
A married couple filing separately faces a $2,500 dependent care FSA ceiling per filer, not $5,000. Electing $5,000 when filing separately would create a plan compliance issue and require correction.
Scenario 4: Mid-year employment change
An employee who terminates mid-year and re-enrolls with a new employer may elect up to the full annual FSA ceiling at the new employer, subject to plan rules. The IRS limit is not prorated for partial-year participation, though employer plans may impose their own restrictions. See FSA enrollment and mid-year changes for the mechanics.
Decision boundaries
Selecting the correct FSA contribution amount requires navigating three intersecting constraints:
- Statutory ceiling: No employee contribution may exceed the IRS-published limit for the applicable plan year ($3,300 for health care FSAs in 2025; $5,000 per household for dependent care FSAs).
- Employer plan design: Employers may set a lower plan-level ceiling. An employer may cap elections at $2,500 even though the IRS allows $3,300. The lower limit governs.
- HSA compatibility: Employees enrolled in a general-purpose health care FSA are ineligible to contribute to an HSA for the same period. Employees who wish to maintain HSA eligibility must elect a limited-purpose FSA instead, which carries the same dollar ceiling but restricts covered expenses to dental and vision.
Health care FSA vs. dependent care FSA: key distinctions
| Feature | Health Care FSA | Dependent Care FSA |
|---|---|---|
| 2025 IRS limit | $3,300 per employee | $5,000 per household ($2,500 if married filing separately) |
| Inflation-adjusted | Yes (annual IRS Revenue Procedure) | No (statutory; unchanged since 2001 except for 2021 ARPA temporary increase) |
| Eligible expenses | Medical, dental, vision (IRS Pub. 502) | Child/dependent care enabling employment (IRS Pub. 503) |
| Carryover permitted | Yes, up to IRS-set amount ($660 for 2025) | No carryover; grace period only |
| HSA compatibility | Only if limited-purpose | Compatible with HSA |
Employees considering whether FSA elections interact with other tax-advantaged accounts should review IRS rules governing FSAs and the comparison of account types at HSA vs. FSA vs. HRA overview and comparison.
References
- IRS Revenue Procedure 2024-40 (2025 limits)
- IRS Revenue Procedure 2023-34 (2024 limits)
- IRS Revenue Procedure 2022-38 (2023 limits)
- IRC Section 125 — Cafeteria Plans (eCFR)
- IRC Section 129 — Dependent Care Assistance Programs (Cornell LII)
- IRS Publication 502 — Medical and Dental Expenses
- IRS Publication 503 — Child and Dependent Care Expenses
- IRS Topic No. 294 — Flexible Spending Arrangements (FSAs)
The law belongs to the people. Georgia v. Public.Resource.Org, 590 U.S. (2020)