2023 FSA Contribution Limit
For 2023, the FSA Contribution Limit is $3,050 (Health FSA salary reduction limit) and $610 (Maximum carryover).
Effective 2023-01-01Source: Rev. Proc. 2022-38 (IRS)Verified 2026-08-30
Compared with 2022
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Health FSA salary reduction limit | $2,850 | $3,050 | +$200 (+7.0%) |
| Maximum carryover | $570 | $610 | +$40 (+7.0%) |
Who it applies to
Employees who contribute to a health flexible spending arrangement (health FSA) through a cafeteria plan under Internal Revenue Code § 125
What changed this year, and why
For taxable years beginning in 2023, the IRS raised the health FSA salary-reduction limit to $3,050 and the maximum carryover amount to $610. The 2022 limits were $2,850 and $570, respectively.
Common questions
- Can unused health FSA funds be carried over to the next year?
- For taxable years beginning in 2023, an employer's cafeteria plan may permit employees to carry over up to $610 of unused health FSA funds into the next plan year. The carryover limit was $570 for 2022.
- Is the $3,050 limit set by the employer or the IRS?
- The $3,050 cap is the maximum amount an employee may elect to set aside through salary reduction. An employer's plan may set a lower limit.
Self-employed people cannot have a health FSA
To have a health FSA, you must be an employee of an employer that has established the plan. Health FSAs are employer-established benefit plans, typically offered as part of a cafeteria plan alongside other employer-provided benefits. Employers have flexibility to design their plans with various combinations of benefits. Self-employed individuals cannot participate in a health FSA because they do not have an employer to establish such a plan for them. Additionally, certain limitations may apply if you are a highly compensated participant or a key employee in the plan.
Self-employed persons aren’t eligible for FSAs.
Publication 969 (2023), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
You elect once a year and cannot change it at will
At the beginning of each plan year, you must elect how much to contribute to your health FSA. Your employer then deducts this amount from your pay periodically throughout the year. Once you make this election, you cannot change or revoke it unless specifically allowed by law and the plan. This means your contribution amount is locked in for the entire year. For 2023, the maximum salary reduction contribution is $3,050.
At the beginning of the plan year, you must designate how much you want to contribute. Then, your employer will de- duct amounts periodically (generally, every payday) in ac- cordance with your annual election. You can change or re- voke your election only if specifically allowed by law and the plan.
Publication 969 (2023), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
The whole election is available on day one
With a health FSA, the full amount you elect to contribute for the year is available to you from the first day of the coverage period, even if you haven't actually contributed that much yet through payroll deductions. You must be able to receive the maximum amount of reimbursement at any time during the coverage period, regardless of how much you have actually contributed so far. The maximum amount you can receive tax free is the total amount you elected to contribute to the health FSA for the year. This means if you elect to contribute $3,050 for 2023, you can immediately use the full $3,050 for qualified medical expenses even though you're only contributing it gradually through your paychecks.
You must be able to receive the maximum amount of reimbursement (the amount you have elected to contribute for the year) at any time during the coverage period, regardless of the amount you have actually contributed. The maximum amount you can receive tax free is the total amount you elected to con- tribute to the health FSA for the year.
Publication 969 (2023), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
Use it or lose it, and the two escapes from it
Health FSAs are generally use-it-or-lose-it plans. This means that amounts remaining in the account at the end of the plan year generally cannot be carried over to the next year. However, the plan may provide one of two exceptions. First, the plan may offer a grace period after the end of the plan year, during which qualified medical expenses incurred can be paid from leftover amounts. Second, the plan may allow a carryover of up to $610 of unused amounts to be reimbursed for qualified medical expenses incurred in the following plan year. A plan may allow either a grace period or a carryover, but it may not allow both. Any amounts exceeding what the plan allows are forfeited. The carryover does not affect your maximum salary reduction contribution for the new year.
Balance in an FSA FSAs are generally "use-it-or-lose-it" plans. This means that amounts in the account at the end of the plan year can't generally be carried over to the next year. However, the plan can provide for either a grace period or a carry- over.
Publication 969 (2023), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
What the money may be spent on, and what it may not
Health FSA funds can be used to reimburse qualified medical expenses incurred by you, your spouse, all dependents you claim on your tax return, and your child under age 27 at the end of your tax year. However, you cannot receive distributions from your FSA for amounts paid for health insurance premiums, amounts paid for long-term care coverage or expenses, or amounts that are covered under another health plan. Qualified medical expenses are those specified in the plan that would generally qualify for the medical and dental expenses deduction, as explained in Publication 502.
Qualified medical expenses. Qualified medical expen- ses are those specified in the plan that would generally qualify for the medical and dental expenses deduction. These are explained in Pub. 502.
Publication 969 (2023), Health Savings Accounts and Other Tax-Favored Health Plans (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2022-38 (IRS)
- Health FSA salary reduction limit
the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,050.
- Maximum carryover
the maximum carryover amount is $610.