Today, the Inter­nal Rev­enue Ser­vice (IRS) announced annu­al infla­tion adjust­ments for more than 50 tax pro­vi­sions, includ­ing an increase in vol­un­tary employ­ee con­tri­bu­tions to employ­er-spon­sored health­care flex­i­ble spend­ing arrange­ments (HFSAs) to $2,850 for plan years begin­ning in 2022, up from the 2021 lim­it of $2,750.

For HFSAs that include a car­ry­over pro­vi­sion, up to $570 may be car­ried over from the 2022 plan year to the next plan year. Note that HFSAs had the option of allow­ing an unlim­it­ed car­ry­over for the 2021 plan year due to fed­er­al COVID-19 relief pro­vi­sions. For unused HFSA funds at the end of the 2022 plan year, how­ev­er, the plan can­not allow more than $570 to be car­ried over for use in the fol­low­ing year.

The IRS also announced an increase in the 2022 month­ly lim­its for qual­i­fied trans­porta­tion fringe ben­e­fits under Code § 132(f). For trans­porta­tion in a com­muter high­way vehi­cle and mass tran­sit pass­es, the lim­it will be $280 (up from $270 this year). The sep­a­rate month­ly lim­it for qual­i­fied park­ing also will increase to $280.

Details of this announce­ment can be found in Rev­enue Pro­ce­dure 2021–45.


By Kath­leen A. Berg­er, CEBS

Orig­i­nal­ly post­ed on Min­er­al