The Internal Revenue Service (IRS) has released Revenue Procedure 2025-32 announcing new 2026 inflation-adjusted limits for Health and Dependent Care FSAs and qualified Commuter Benefits.

This is in addition to the annual limits previously announced in Revenue Procedure 2025-19 (previous alert).

2026 Health FSA Limits:

• The annual Health FSA contribution limit is $3,400 (up from $3,300 in 2025).
• The annual carryover limit is $680 (up from $660 in 2025).

2026 Dependent Care FSA Limit:

• The annual Dependent Care FSA contribution limit is $7,500 (up from $5,000).
• This limit was adjusted under the One Big Beautiful Bill and is not indexed for inflation (previous alert).

2026 Commuter Benefit Limits:

• The monthly limit for qualified transportation expenses (transit, vanpooling) is $340 (up from $325 in 2025).
• The monthly limit for parking expenses is also $340 (up from $325 in 2025).

Client Action: Clients should review their plan limits when preparing for the 2026 plan year and ensure plan communications, plan documents, and systems are updated as needed. Piper Jordan is here to help. If you have any questions or need support, please reach out to your consulting team.

This alert is for general informational purposes only and is not legal advice. If legal advice, counsel, or representation is needed, the services of a legal professional should be sought. These alerts are being sent from an active email address that is monitored throughout the day. For additional information, please reach out to your Piper Jordan account team directly for assistance.