2022 FSA, TRA, and Adoption contribution limits announced

The Internal Revenue Service (IRS) announced the official 2022 Flexible Spending Account (FSA), Transportation Reimbursement Arrangement (TRA), and adoption credit limits, and it’s good news for those wanting to save money on their eligible expenses.

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2022 contribution limits

  • 2022 Healthcare FSA/Limited Purpose FSA - $2,850
  • 2022 FSA carryover - $570
  • 2022 DCAP (also known as Dependent Care FSA) - $5,000 (Family); $2,500 (Married filing separately)
  • 2022 TRA (Parking and transit) - $280/month
  • 2022 Adoption credit limit - $14,890

Flexible Spending Accounts

The 2022 healthcare FSA contribution limit is an increase of $100 from the 2021 healthcare FSA contribution limit ($2,750), and the carryover limit is an increase of $20 from the 2021 limit ($550).

The 2022 DCAP (also known as Dependent Care FSA) contribution limits decreased from $10,500 in 2021 for families and $5,250 for married taxpayers filing separately. The 2021 DCAP limits came in response to the COVID-19 pandemic as a temporary relief to working parents.

Both healthcare FSAs and DCAPs are versatile healthcare savings vehicles that allow individuals to receive tax benefits when they spend funds on eligible expenses.

There are actually four general types of FSAs:

  • Healthcare FSA: Can be used for eligible medical expenses, including deductibles, copays, and coinsurance
  • Post-deductible FSA: Can be used for certain eligible medical expenses once a minimum deductible has been met. Can be used in conjunction with a Health Savings Account (HSA)
  • Limited-purpose FSA: Can be used to pay for eligible vision and dental expenses. Can be used in conjunction with an HSA
  • Dependent Care FSA: Can be used to pay for eligible expenses related to tax dependents, including day care, preschool, elderly care, and other types of dependent care. This type of FSA can only be used if the dependent care is necessary for you or your spouse to work, look for work, or to attend school full time.

Rollover funds: In general, FSA funds are a use-it-or-lose-it account. However, employees can be offered one of two options:

  1. Grace period: Allows for a maximum of an extra 2.5 months to use FSA funds for eligible expenses incurred the following plan year
  2. Carryover: Allows accountholders to carry over a certain amount (for 2022, the limit is $570) that can be used in the following year

Employers can offer one of these options but not both, and neither option is required. To learn more about FSAs, click here.


Transportation Reimbursement Arrangements

For 2022, the TRA (commuter) contribution limits have increased $10 more per month than the 2021 contribution limit ($270).

A TRA allows employees to set aside pre-tax funds to pay for their commute to work. For 2022, if an employee were to use both transit and parking, they could set aside up to $6,720 annually. Assuming a 30% effective tax rate1 that means they could potentially reduce their tax liability by more than $2,000.

Learn more about TRA benefits by visiting here. Note that you, the employer, must opt to enroll in TRA in order for employees to sign up for the benefit.

Adoption Credits

The IRS also increased the Adoption Assistance Exclusion or Adoption Credit amounts to $14,890, an increase of $490 from 2021 ($14,400).

Parents who either adopted or tried to adopt a child may seek to claim the adoption credit on their individual tax returns. If a taxpayer’s employer helped with adoption expenses through a qualified adoption assistance program, the taxpayer may qualify to exclude that amount from their individual taxes.

Learn more about Further’s Adoption Assistance program here.



.These new contribution or credit limits aren’t just updated figures to memorize. They offer the potential to save real money on eligible expenses and allow employees to take full advantage of their FSA or TRA accounts or to receive the most credit possible if they are looking to adopt.


1.        Based on average federal income and payroll taxes. Estimate for illustrative purposes only. Actual savings may vary and are dependent on individual tax status. Commuter benefits are never taxed at a federal income tax level when used appropriately for qualified expenses.


Further does not provide legal, tax, or financial advice.


Further was acquired by HealthEquity, the nation’s largest non-bank health savings account (“HSA”) custodian on November 1, 2021. Learn more about the acquisition here.

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