Capitol Benefits Group News & Updates

IRS Announces Tax Benefit Updates for 2025

The Internal Revenue Service (IRS) announced the annual inflation adjustments for the tax year 2025 late last week. Below we have highlighted a few of the more frequently asked-about changes.

Qualified Transportation Fringe Benefit - the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $325, an increase of $10 from the limit for 2024.

Health Flexible Spending Accounts (FSAs) - the dollar limitation for employee salary reductions for contributions to health FSAs increases to $3,300. For plans that permit the carryover of unused amounts, the maximum carryover amount is $660, an increase of $20 from 2024.

Health Savings Accounts (HSAs) - the maximum amounts that individuals can set aside in their HSAs will increase from $4,150 to $4,300 and from $8,300 to $8,550 for individual and family coverage levels, respectively, from last year. There is still a $1,000 catch-up contribution amount for individuals aged 55 and older.

As we prepare to move into a new tax year period, it’s important to update employee communication materials, plan documents, and open enrollment announcements to reflect the new amounts.

Should you have questions about these changes, please feel free to simply respond to this email to reach your Capitol Benefits Group team!