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2023 Cost of Living Adjustments Announced

October 19, 2022

The IRS has released its 2023 cost of living adjustments – which can impact certain benefit accounts, retirement plans and other programs.  

Highlights of changes coming in 2023:

FSA Contributions: Contributions to a healthcare flexible spending account have increased $200 to $3,050- up from $2,850 in 2022.

FSA Carryover Amount: If the employer allows for carry-over, FSA participants can now carry over $610 – up $40 from $570 in 2022.

Transit & Parking Benefits: The monthly contribution limit on parking and transit benefits will increase to $300 – up from $280 in 2022.

Adoption Assistance Program: The maximum exclusion for qualified adoption expenses under the adoption assistance program is now $15,950- up from $14,890 in 2022.

Taxable Years Beginning in 2023 Taxable Years Beginning in 2022
Limit on voluntary employee salary reduction contributions to a health flexible spending arrangement (Section 3.16 of Rev. Proc. 2021-45) $3,050 $2,850
Maximum carryover amount of unused FSA amounts (Section 3.16 of Rev. Proc.2021-45 $610 $570
Monthly limit on fringe benefit exclusion for transit and parking (Section 3.17 of Rev. Proc. 2021-45) $300 $280
Maximum exclusion for qualified adoption expenses furnished pursuant to an adoption assistance program (Section 3.19 of Rev. Proc. 2021-45) $15,950 $14,890
Maximum reimbursement from a qualified small employer health reimbursement arrangement (QSEHRA) (Section 3.62 of Rev. Proc. 2022-38)  $5,850
($11,800 for family coverage)
$5,450
($11,500 for family coverage)

 

The above chart does not include all the provisions under the cost-of-living adjustment. 

For a full break down of the changes made by the IRS for benefit account contributions, please visit:

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