The IRS announced Tuesday May 12th 2020, IRS Notice 2020-33, which increases the carryover limit (currently $500) of unused amounts remaining as of the end of a plan year in a health FSA under a cafeteria plan that may be carried over to pay or reimburse a participant for medical care expenses incurred during the following plan year.
The notice increases the maximum $500 carryover amount for 2020 or later years to an amount equal to 20% of the maximum health FSA salary reduction contribution for that plan year.
Under this notice, the health FSA maximum carryover from a plan year starting in calendar year 2020 to a new plan year starting in calendar year 2021 is $550.
The full notice can be viewed on the IRS website
here.