The IRS has announced the updated contribution limits for 2025, covering medical flexible spending accounts (FSAs), commuter benefits, adoption assistance, and more, as part of Revenue Procedure 2024-40. These adjustments, which occur annually to account for inflation, provide important updates for both employers and employees.
2025 Medical FSA Limits (Including Limited and Combination FSAs)
- 2024 Limit: $3,200 per year
- 2025 Limit: $3,300 per year
2025 Medical FSA Carryover
- 2024 Carryover: $640 per year
- 2025 Carryover: $660 per year
2025 Commuter Benefits Limits
- 2024 Limit: $315 per month
- 2025 Limit: $325 per month
2025 Adoption Assistance Limits
- 2024 Limit: $16,810 per year
- 2025 Limit: $17,280 per year
The maximum amount excluded from an employee’s gross income for the adoption of a special needs child through an adoption assistance program is $17,280. This same amount can be excluded for qualified adoption expenses incurred through the same program.
For taxpayers, the adoption credit begins to phase out with modified adjusted gross incomes exceeding $259,190, and is fully phased out at $299,190 or more.
2025 Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Limits
- 2024 Limit: $6,150 per year (Self-only), $12,450 per year (Family)
- 2025 Limit: $6,350 per year (Self-only), $12,800 per year (Family)
Previously Announced: 2025 Health Savings Account (HSA) Limits
- 2024 Limit: $4,150 (Self-only), $8,300 (Family)
- 2025 Limit: $4,300 (Self-only), $8,550 (Family)
2025 High-Deductible Health Plan (HDHP) Amounts/Limits
- HDHP Self-Only Coverage:
- 2024 Minimum Deductible: $1,600
- 2024 Maximum Out-of-Pocket Limit: $8,050
- 2025 Minimum Deductible: $1,650
- 2025 Maximum Out-of-Pocket Limit: $8,300
- HDHP Family Coverage:
- 2024 Minimum Deductible: $3,200
- 2024 Maximum Out-of-Pocket Limit: $16,100
- 2025 Minimum Deductible: $3,300
- 2025 Maximum Out-of-Pocket Limit: $16,600
Key Takeaways
- The 2025 medical FSA contribution limit will increase to $3,300, up $100 from 2024.
- Employees can carry over $660 from their medical FSA for plan years starting in 2025, an increase of $20 from 2024.
- The 2025 monthly commuter benefits limit for mass transit and parking will be $325 per month.
- QSEHRA employer contributions are capped at $6,350 for self-only coverage and $12,800 for families.
- The 2025 HSA contribution limits were previously announced, with a cap of $4,300 for individuals and $8,550 for family coverage.
Employers should review these updated limits and ensure their benefits offerings align with the new IRS guidelines.
