NOVEMBER 6TH, 2019

IRS Releases Benefit Limits for 2020

IRS Releases Benefit Limits for 2020

November 6, 2019 

Today, the Internal Revenue Service announced in Revenue Procedure 2019-44 the annual inflation adjustments for more than 60 tax provisions for 2020, including the tax rate schedules, and other tax changes. This Revenue Procedure provides details about these annual adjustments: 

 There are several benefit limitations for 2020 included: 

* The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) increases to $2,750.

*The amount for the adoption credit or the amount excluded for adoption assistance allowed for an adoption of a child with special needs is increased to $14,300.

*The dollar amount for employee health Insurance expense of small employers is $27,600. This used for the tax credit.

*The monthly limitation for qualified transportation fringe benefit regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $270.  The monthly limit for qualified parking is also $270.

*The limitations regarding eligible long-term care premiums includible in the term "medical care," are increased as follows:

Attained Age Before the Close of the Taxable Year Limitation on Premiums

  

40 or less                                                                                             $430 
                                                                                                      

More than 40 but not more than  50                                                    $810

 

More than 50 but not more than 60                                                   $1,630
                                                                                                                                More than 60 but not more than 70                                                   $4,350
                                                                             

More than 70                                                                                     $5,430

*The deductible and out-of-pocket limits for "high deductible health plans" for Medical Savings Accounts are as follows:

For self-only coverage, a health plan that has an annual deductible that is not less than $2,350 and not more than $3,550, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,750.

For family coverage, a health plan that has an annual deductible that is not less than $4,750 and not more than $7,100, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,650

*The dollar total amount of payments and reimbursements for any year under a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) can not exceed $5,250 ($10,600 for family coverage).

For a copy of Revenue Ruling 2019-44 please click on the link below:

https://www.irs.gov/pub/irs-drop/rp-19-44.pdf



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