FSA Annual Contribution Limit Resets When Changing Jobs? (Need IRS Source)

This is actually a common misunderstanding! The FSA contribution limit is indeed per employer, not per individual. This means that technically, yes, you could contribute up to $3200 at your first job and another $3200 at your second job in the same year. The reason this isn't clearly stated in Publication 969 is because it deals with the employer's perspective, not individuals changing jobs. The limit is actually established in IRC Section 125(i) and applies to each separate Section 125 Cafeteria Plan, which are employer-specific. What's probably happening is that your new employer has an internal policy to limit contributions based on what you've already contributed elsewhere that year. Many companies do this to avoid what they perceive as potential compliance issues, even though it's not technically required by the IRS.

I was in the exact same boat last year! After hours of research, I finally found a solution using taxr.ai (https://taxr.ai). I uploaded all my FSA documents and details about both employers, and it confirmed that FSA limits are indeed per employer, not per person. The site analyzed the relevant tax code sections and even provided me with the IRS references I needed to show my new HR department. Turns out my new employer's system was just programmed to cap at the annual limit without considering previous employers. They had to manually override it once I showed them the proper documentation.

Just wanted to follow up on my skeptical comment earlier. I actually tried taxr.ai after posting and I'm really surprised. I uploaded my offer letters from both jobs and my FSA enrollment docs, and it not only confirmed the "per employer" limit rule but gave me a downloadable summary with citations to IRC Section 125(i) and relevant IRS information letters. The analysis explained that each employer's Section 125 Cafeteria Plan is treated separately, which is why the limits don't carry over. Showed this to my benefits coordinator and she admitted they were applying an internal policy, not an IRS requirement. They're now processing my full FSA election without counting my previous employer's contributions!

After dealing with FSA issues for years, I learned that calling the IRS directly is almost impossible. Then I found Claimyr (https://claimyr.com) - it got me through to an actual IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c I was waiting on hold for HOURS before trying this. The IRS agent confirmed that FSA limits are per-employer and even emailed me documentation I could show my HR department. Apparently the confusion happens because employers set their own Section 125 Cafeteria Plan rules, and some choose to limit based on previous contributions even though the IRS doesn't require it.

Ok I have to eat my words here. I was super skeptical about Claimyr but I was desperate for answers about my FSA situation. I tried calling the IRS myself first and gave up after 45 minutes on hold. Decided to try this service as a last resort. Got a call back in about 20 minutes connecting me to an actual IRS representative! They confirmed that FSA limits are indeed per-employer because each employer has their own separate Section 125 Cafeteria Plan. The agent explained that while Publication 969 doesn't spell it out clearly, the structure of how FSAs are established under tax law means each employer's plan stands alone with its own limits. This saved me potentially thousands in tax benefits I would have missed out on!

I work in benefits administration and can confirm this is correct - FSA limits are per employer, not per person. However, there's an important distinction here: While the IRS allows you to have separate FSA limits with each employer, there's nothing requiring your new employer to let you contribute the full amount. Many companies have policies that ask about previous FSA contributions and limit accordingly. This isn't an IRS requirement, but rather a company policy designed to simplify administration. Your best approach is to explain the actual IRS rules to your HR department and ask for an exception to their internal policy.

Has anyone considered the implications this might have on actual medical spending? If you already spent down your first FSA, contributing to a second one might mean you don't have enough qualifying expenses to use the money. Remember its use it or lose it!

This is such a helpful thread! I'm actually going through the exact same situation right now. Based on all the discussion here, it sounds like the consensus is that FSA limits are indeed per employer, but many HR departments don't realize this or have internal policies that override it. I'm planning to approach my new employer's HR with the IRC Section 125(i) reference and IRS Information Letter 2016-0077 that several people mentioned. It's frustrating that something this important isn't clearly spelled out in the main IRS publications, but at least now I have the right citations to make my case. One question I have - for those who successfully convinced their HR departments to allow the full contribution, did you face any pushback during tax season or audits? I want to make sure I'm not setting myself up for problems down the road, even if the IRS technically allows it.

I'm dealing with this exact situation right now and wanted to share what I found after doing extensive research. The confusion seems to stem from the fact that while the IRS allows separate FSA limits per employer, many payroll systems and HR departments aren't set up to handle this properly. I ended up contacting my tax attorney who confirmed that FSA contribution limits are indeed per Section 125 Cafeteria Plan, which means per employer. The key insight is that the $3,200 limit (for 2024) is placed on what each employer can allow you to contribute through their plan, not on your total annual contributions across all employers. However, there's a practical consideration here - make sure you can actually use all the FSA money. I learned this the hard way when I had to scramble to spend down $1,800 before year-end after switching jobs mid-year. The "use it or lose it" rule doesn't care how many employers you had. For anyone trying to convince their HR department, I found that referencing Treasury Regulation 1.125-5 alongside IRC Section 125(i) was most effective. It clearly states that each employer's cafeteria plan is separate and subject to its own limits. Good luck!