Earlier today, the Internal Revenue Service (IRS) announced the annual inflation adjustments for more than sixty tax provisions for tax year 2026.
Highlights of changes in Revenue Procedure 2025-32
The items of greatest interest to most Diversified agents and clients include the following dollar amounts:
- Qualified Transportation Fringe Benefit – the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $340, an increase of $15 from the limit for 2025.
- Health Flexible Spending Accounts (FSAs) – the dollar limitation for employee salary reductions for contributions to health FSAs increases to $3,400. For plans that permit the carryover of unused amounts, the maximum carryover amount is $680, an increase of $20 from 2025.
Note: Diversified will automatically increase FSA plan limits – including carryover – so no action is required at this time. (However, if a client previously directed Diversified to not implement annual adjustments, the limits will not change.)