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2026 Health FSA and Other Limits Announced
October 10, 2025
At a Glance
The IRS has announced the 2026 tax year limits for Health FSAs, qualified transportation and parking benefits, Qualified Small Employer Health Reimbursement Arrangement (QSERHA) limits, and Excepted Benefit HRA (EBHRA) limits.
2026 Plan Limit Increases
IRS Revenue Procedure 2025-32 outlines annual inflation adjustments for multiple tax provisions, including contribution limits for Health FSAs, reimbursement limits for qualified transportation fringe benefit plans, and qualified small employer health reimbursement arrangements (QSEHRAs). All plan limits addressed in the revenue procedure are increasing for 2026.
Additionally, IRS Revenue Procedure 2025-19 states that the inflation-adjusted maximum for excepted benefit health reimbursement arrangements (EBHRAs) will increase to $2,220 per year in 2026.
Benefit Plan | 2025 Limit | 2026 Limit | Change |
Health FSA | $3,300/year | $3,400/year | +$100 |
Health FSA Carryover | $660/year | $680/year | +$20 |
Qualified Commuter and Transit Benefits | $325/month | $340/month
| +15 |
Qualified Parking | $325/month | $340/month
| +15 |
| QSEHRA Payments and Reimbursements (single coverage) | $6,350 per year (single coverage) | $6,450/year
| +$100 |
QSEHRA (family coverage) | $12,800/year | $13,100/year | +$300 |
| EBHRA | $2,150/year | $2,200/year | +$50 |
Next Steps
As open enrollment season begins, employers should update their materials and communicate any updates to their employees. Employers with plans adopting the new limits may offer a brief special enrollment period for participants to update their selections.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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