The Keenan Blog

Blog

IRS 2025 Contribution Limits Have Been Published

The IRS has recently released the 2025 contribution limits for various benefits, including medical flexible spending accounts (FSAs), commuter benefits, and more.

Medical Flexible Spending Accounts (FSAs)

For 2025, the contribution limit for medical FSAs, including limited and combination FSAs, has been increased to $3,300 per year, up from $3,200 in 2024. Additionally, employers can allow employees to carry over $660 from their medical FSA for taxable years beginning in 2025, which is a $20 increase from the previous year.

• 2024: $3,200 per year
• 2025: $3,300 per year

Commuter Benefits

• 2024: $315 per month
• 2025: $325 per month

Adoption Assistance

The adoption assistance limits for 2025 have also been updated. The maximum amount that may be excluded from an employee’s gross income for the adoption of a special needs child through an adoption assistance program is $17,280. This amount is the same as what may be excluded for expenses incurred by an employer for qualified adoption expenses under the same program. The available adoption credit begins to phase out for taxpayers with modified adjusted gross income more than $259,190 and is completely phased out for those with an income of $299,190 or more.

• 2024: $16,810 per year
• 2025: $17,280 per year

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

• 2024: $6,150 per year (self-only); $12,450 per year (family)
• 2025: $6,350 per year (self-only); $12,800 per year (family)

Health Savings Accounts (HSAs)

• 2024: $4,150 (self-only); $8,300 (family)
• 2025: $4,300 (self-only); $8,550 (family)

High Deductible Health Plans (HDHPs)

HDHP (self-only coverage)

• 2024: $1,600 (minimum deductible), $8,050 (maximum out-of-pocket limit)
• 2025: $1,650 (minimum deductible), $8,300 (maximum out-of-pocket limit)

HDHP (family coverage)

• 2024: $3,200 (minimum deductible), $16,100 (maximum out-of-pocket limit)
• 2025: $3,300 (minimum deductible), $16,600 (maximum out-of-pocket limit)

These updates to the IRS contribution limits for 2025 reflect the ongoing adjustments for inflation and aim to provide taxpayers with more flexibility and support in managing their benefits. Employers and employees alike should take note of these changes to maximize their benefits and plan accordingly.