IRS Announces 2022 Pre-Tax Contribution Limits

The Internal Revenue Service recently announced annual inflation adjustments for 2022. For taxable years beginning in 2022, IRS Rev. Proc. 2021-45 indicates the following maximums apply for Health Flexible Spending Arrangements, Adoption Assistance Programs, and Commuter Benefits:

Health FSA

The annual Health FSA limit will increase $100 from $2,750 in 2021 to $2,850 in 2022.

The annual Dependent Care FSA limit will revert to $5,000 in 2022.

FSA Balance Rollovers

The increase of the Health FSA limit means an increase to the Health FSA rollover amount allowed for 2022. Up to $570 (20% of the regular election maximum) will be rolled from the 2022 plan year into the 2023 plan year.

Dependent Care FSA balances from 2022 will not roll into 2023. Any balance that remains in the Dependent Care FSA after the 2022 claims submission deadline will be forfeited.

Commuter Benefits Limits

The monthly transit and parking limits will increase from $270 in 2021 to $280 in 2022.

Adoption Assistance Limit

The annual Adoption Assistance limit will increase from $14,400 in 2021 to $14,890 in 2022.

If you are a Vita Flex FSA client who currently offers the IRS maximum and your plan renews January 1, 2022, your limits have been automatically increased for the 2022 plan year, unless you previously requested otherwise.

If you are a Vita Flex Commuter Benefits client, the monthly pre-tax limit will be automatically increased to the IRS maximum for the January benefit month.