Changes to approved amounts for Flexible Spending Accounts (FSAs) were recently announced by the IRS.
Citing an inflation adjustment, the IRS announced in December that the FSA annual limit amount will increase by $50; the amount has gone to $2,550 from $2,500. However there will be no changes to the annual limit for dependent care FSA, which remains at $5,000 for those who qualify, are married and file a joint return. The amount for those who are married and file separate returns will remain at $2,500. Announced in 2014 and continuing this year, the IRS is also allowing employers the opportunity to have employees carry up to $500 in unused health FSA funds over into 2015. Another option is to allow a grace period that will give employees an extra two and half months to spend their FSA funds balance. Employers are not required to offer either option but if desired, can only choose one.