--- title: IRS Announces 2026 COLAs for Transportation Fringes, FSA Deferrals description: IRS announces 2026 COLAs for transportation fringes and FSA deferrals. image: https://payroll.org/images/default-source/default-album/irs-announces-2026-colas-for-transportation-fringes-fsa-deferrals.jpg?sfvrsn=c90bfbe3_0 --- [![soc-fb](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_fb.svg "soc-fb")](https://www.facebook.com/American-Payroll-Associations-Chapter-Relations-877434285724525/) [![soc-in](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_li.svg "soc-in")](http://www.linkedin.com/groups?about=&gid=1051077&trk=anet_ug_grppro) [![soc-tw](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_tw.svg "soc-tw")](https://twitter.com/APAChapters?lang=en) - [Home](https://blogs.payroll.org/chapter-leaders) - [About](https://blogs.payroll.org/about) - [Connect](https://blogs.payroll.org/connect) - [Resources](https://blogs.payroll.org/resources) ![23-PayNewsNow-Horiz-Logo](https://blogs.payroll.org/hs-fs/hubfs/23-PayNewsNow-Horiz-Logo.png?width=1300&name=23-PayNewsNow-Horiz-Logo.png "23-PayNewsNow-Horiz-Logo") [![26 PayrollOrg®RGB-NoTag long](https://blogs.payroll.org/hs-fs/hubfs/26%20PayrollOrg%C2%AERGB-NoTag%20long.jpg?width=1300&name=26%20PayrollOrg%C2%AERGB-NoTag%20long.jpg "26 PayrollOrg®RGB-NoTag long")](https://payroll.org/) ![](https://blogs.payroll.org/hs-fs/hubfs/Jyme.png?width=35&name=Jyme.png) Custom URL No Widget: By [Jyme Mariani, Esq.](https://blogs.payroll.org/pay-news-now/author/jyme-mariani-esq) on Oct 10, 2025 9:36:06 AM # IRS Announces 2026 COLAs for Transportation Fringes, FSA Deferrals The IRS released cost-of-living-adjustments (COLAs) for 2026 reflecting any increases in excludable transportation fringes and the flexible spending arrangement (FSA) deferral limit, among other changes \[**[Rev. Proc. 2025-32](https://payroll.org/docs/default-source/irs-and-ssa-announcements/25k09-COLAs-2026.pdf)**, 10-9-25\]. For 2026, the amounts that may be excluded from gross income for employer-provided qualified transportation fringe benefits and qualified parking increase to $340 per month ($325 in 2025). For plan years beginning in 2026, the dollar limitation for voluntary employee salary reductions for contributions to health FSAs increases to $3,400 ($3,300 in 2025). For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount increases to $680 ($660 in 2025). The Revenue Procedure also addresses changes for 2025 made by Public Law 119-21, known as the **[One Big Beautiful Bill Act](https://payroll.org/compliance/compliance-overview/hot-topics/one-big-beautiful-bill-act)**. ### **For More Information** For more information, see the PAYO Compliance Update, **[IRS Announces 2026 COLAs for Transportation Fringes, FSA Deferrals, and More](https://payroll.org/compliance/compliance-overview/compliance-updates/irs-announces-2026-colas-for-transportation-fringes-fsa-deferrals-and-more)**. Compliance updates are emailed to PayrollOrg members and are also available on the **[Compliance Updates](https://payroll.org/compliance/compliance-overview/compliance-updates)** webpage. --- To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out **[Payroll Source Plus](https://ebiz.payroll.org/ebusiness/ProductCatalog/Product.aspx?ID=6067)**! --- *Jyme Mariani, Esq., is Director of Payroll Information Resources for PayrollOrg.* ### Search ![payroll-logo-white](https://blogs.payroll.org/hs-fs/hubfs/payroll-logo-white.png?width=200&name=payroll-logo-white.png "payroll-logo-white") [Privacy Policy](http://www.americanpayroll.org/privacy/)     |     Acceptable Use ©[PayrollOrg](http://payroll.org) [![soc-fb](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_fb.svg "soc-fb")](https://www.facebook.com/PayrollOrg) [![soc-in](https://blogs.payroll.org/hubfs/ct-23-assets/footer-icon_li.svg "soc-in")](https://www.linkedin.com/company/payroll-org/mycompany/) [![Twitter-X-White-Logo-PNG](https://blogs.payroll.org/hs-fs/hubfs/Twitter-X-White-Logo-PNG.png?width=20&height=19&name=Twitter-X-White-Logo-PNG.png)](https://twitter.com/PayNews)