The IRS also has raised the maximum tax-free amount allowable under the public transit subsidy program. Image: Daniel J. Macy/Shutterstock.com

The IRS raised from $3,050 to $3,200 in 2024 the maximum that can be set aside as pre-tax money in health care accounts under flexible spending account programs. In the benefits open season that is continuing through December 11, federal employees—although not retirees—may elect to fund through payroll withholding a health care account and/or a dependent care account whose maximum (individually or for a couple) is $5,000.

Meanwhile, the maximum that can be carried forward from 2024 into 2025 in health care accounts will be $640, up from the $610 that can be carried from 2023 into 2024. The individual must have an account for the following year to be eligible. In dependent care accounts, there is a 10-week grace period for using unspent money carried from one year to the next.

The IRS also has raised the maximum tax-free amount allowable under the public transit subsidy program—formally, the “qualified transportation fringe benefit”—from $300 to $315 a month.

Policies vary among agencies and among locations within agencies, in some cases as set in labor-management contracts. Some pay a subsidy in the form of passes or vouchers purchased by the agency and others allow employees to reduce their pre-tax income by an amount equal to their transit or van pool expenses up to the maximum.

The much-less-used tax-free benefit for parking at a transit lot is rising in the same way.

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See also,

The Best Ages for Federal Employees to Retire

Adding FEGLI Coverage if You Waived it

How Much Federal Employee Benefits are Actually Worth

Are Feds Over-Compensated?

How Not to Lose Your Federal Insurance at Retirement

What TSP Millionaires Do That Others Don’t

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FERS Retirement Guide 2023