IRS sets 2027 limits: health FSA rises to $3,500; transit and parking caps rise to $350 a month each
Key points
- Health FSA employee contribution limit rises to $3,500, with up to $700 carryover
- Transit and parking caps rise to $350 a month each; educational assistance rises to $5,400
- QSEHRA limits are $6,700 (self-only) and $13,550 (family); 2027 withholding tables to come in Publication 15-T
The IRS announced 2027 inflation adjustments covering almost 70 tax provisions in Rev. Proc. 2026-35. The health FSA limit rises $100 to $3,500, with up to $700 carryover. Transit and parking caps rise to $350 a month each, up $10 each. Educational assistance rises to $5,400, adoption assistance to $18,250, and QSEHRA to $6,700 (self-only) and $13,550 (family). 2027 withholding tables will be published in Publication 15-T.
What employers should do
- Update 2027 benefit election and FSA contribution materials for employees
- Update payroll withholding systems once Publication 15-T is released
Policy details
- Jurisdiction
- Federal
- Status
- Final rule
- Effective date
- —
- Employers covered
- U.S. employers offering FSA, commuter, education, adoption and QSEHRA benefits
- Official source
- View official source ↗
Original report: View source ↗AI-assisted brief; may contain inaccuracies. Rely on the original reports and official documents. For information only; not legal, immigration or insurance advice.