
The IRS made an official announcement on 2023 contribution limits for health care flexible spending accounts (FSAs), commuter benefits, and adoption assistance. For the 2023 plan year, FSA and commuter benefit contribution limits increased by $20/month from 2022 while adoption assistance is increasing by $1,060.
The IRS uses the cost of living and inflation to determine limits, which is detailed in Revenue Procedure 2020-45.
Heading into a New Year
As we head into 2023, there are many unknown health care variables, but on the positive side, overall benefits are still the same. For employees, they will continue to be able to use tax-free money to pay for eligible items and services while reducing their taxable income. Likewise, employers will continue to be able to attract and retain employees with valuable benefit packages, as well as save on payroll taxes. We’re all in it together, and we’re ready for whatever comes next.
About the Author:
Carla Wardin lives in St Johns, Michigan, where she focuses her writing on the health and technology industries.