2013/2014 FSA Contribution Limits

by Michael on Nov 18, 2013

In writing about limited-purpose FSAs, I realized that I’ve never documented the annual contribution limits associated with regular (healthcare) flexible spending accounts. So here’s that info, with dependent-care limits included as a bonus.

Prior to 2013, there was no federally mandated limit on FSA contributions. Rather, the limits determined by employers and many (if not most) families could set aside upwards of $5k/year. Depending on your tax bracket, this was a huge benefit.

Effective in 2013, however, contributions to general purpose healthcare FSAs have been capped at $2,500/year. While this number is indexed to inflation, it will remain at $2,500 for 2014. This change traces back to the 2010 passage of the Affordable Care Act, which instituted a federal cap on FSA contributions.

Of course, even with the now-reduced contribution limits as well as the possibility of a small amount of carryover, you still have to be careful not to set too much aside thanks to the use-it-or-lose-it nature of these accounts.

For their part, contributions to dependent-care FSAs are capped at $5,000/year for married couples who file jointly, or $2,500/year for individual filers. These limits are completely separate from the healthcare FSA limits.

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