by Matt Gerard
on November 3, 2020
Today, the IRS issued Revenue Procedure 2020-45 which provides some of the 2021 cost-of-living adjustments for inflation as provided by the Internal Revenue Code. For plan sponsors of welfare benefit and fringe benefit plans, the most applicable adjustments announced in Revenue Procedure 2020-45 are listed in the following table:
| Cafeteria Plan Limits and Thresholds | ||||
| Health FSAs | 2021 (new) | 2020 (old) | ||
| Maximum Health FSA Salary Reductions | $2,750 | $2,750 | ||
| Maximum carryover amount: | $550 | $550 | ||
| Adoption Assistance | 2021 (new) | 2020 (old) | ||
| Maximum Exclusion for Employer-Provided Adoption Assistance | $14,440* | $14,300 | ||
| Adoption Tax Credit Limit | $14,440* | $14,300 | ||
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*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $216,660 and is completely phased out for taxpayers with modified adjusted gross income of $256,660 or more. |
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| Consumer-Driven Health Care Limits and Thresholds | ||||
| QSEHRAs | 2021 (new) | 2020 (old) | ||
| Maximum Reimbursement Allowed | ||||
| Single | $5,300 | $5,250 | ||
| Family | $10,700 | $10,600 | ||
| Fringe Benefit Limits and Thresholds | ||||
| Adoption Assistance | 2021 (new) | 2020 (old) | ||
| Maximum Exclusion for Employer-Provided Adoption Assistance | $14,440* | $14,300 | ||
| Adoption Tax Credit Limit | $14,440* | $14,300 | ||
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*The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $216,660 and is completely phased out for taxpayers with modified adjusted gross income of $256,660 or more. |
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| Transportation Fringe Benefits | 2021 (new) | 2020 (old) | ||
| Parking | $270/mo. | $270/mo. | ||
| Transit Passes & Vanpooling (combined) | $270/mo. | $270/mo. | ||
Earlier this year, the IRS released Revenue Procedure 2020-32 which contained the 2021 cost-of-living adjusted limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs). Here are the details:
| Consumer-Driven Health Care Limits and Thresholds | |||
| HSAs | 2021 (new) | 2020 (old) | |
| HDHP Minimum Annual Deductible | |||
| Individual | $1,400 | $1,400 | |
| Family | $2,800 | $2,800 | |
| HDHP Out-of-Pocket Maximum | |||
| Individual | $7,000 | $6,900 | |
| Family | $14,000 | $13,800 | |
| HSA Maximum Contribution Limit | |||
| Individual | $3,600 | $3,550 | |
| Family | $7,200 | $7,100 | |
| HSA Contribution Limit | $1,000 | $1,000 | |
Be sure to check www.nbsbenefits.com/limits for the latest information on all limits related to retirement, health, and welfare benefit plans as well as consumer-driven health care.
