IRS Boosts 2024 Employee FSA Contribution Limit to $3,200

FSAs can be used to meet medical expenses such as prescription medications and dental care that may not be covered under health plans.

A sign outside the Internal Revenue Service building is seen in Washington on May 4, 2021. Patrick Semansky/AP Photo

The Internal Revenue Service (IRS) raised the contribution limit to a key employee health care account while also increasing the amount of money that can be carried over to the next year.

Flexible Spending Arrangement (FSA) is a type of savings account that employees can use to pay for medical expenses. The contributions come from the wages of employees. “For 2024, there is a $150 increase to the contribution limit for these accounts,” the IRS said in a Dec. 8 press release. “An employee who chooses to participate in an FSA can contribute up to $3,200 through payroll deductions during the 2024 plan year. Amounts contributed are not subject to federal income tax, Social Security tax, or Medicare tax.” For 2023, the contribution limit was $3,050.