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IRS announces some 2022 benefit plan limits

IRS announces some 2022 benefit plan limits

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The IRS has issued Revenue Procedure 2021-45, which contains 2022 limits for health flexible spending arrangements, qualified transportation fringe benefits, adoption assistance programs, and long-term care premiums.

Download this FYI Alert as a printable PDF.

Health flexible spending arrangements

The annual limit on employee salary reduction contributions to health flexible spending arrangements under Section 125(i) for plan years beginning in 2022 has increased by $100 from the 2021 limit. The maximum carryover amount has also increased.

2022 2021
Maximum salary reduction amount $2,850 $2,750
Maximum carryover amount $570 $550

Qualified transportation fringe benefits

The monthly limits under Section 132(f) for tax years beginning in 2022 increased from the 2021 limits.

2022 2021
Commuter highway vehicle and transit pass $280 $270
Qualified parking $280 $270

Adoption assistance programs

For employer-provided adoption assistance programs, the maximum amount excludible from an employee’s income in 2022 (compared with 2021) for the adoption of a child (both for regular and special-needs adoptions) is shown below. The excludible amount phases out for taxpayers with modified adjusted gross income that exceeds certain levels.

2022 2021
Excludible amount $14,890 $14,440
Phase-out income thresholds
Phase-out begins $223,410 $216,660
Phase-out complete $263,410 $256,660

Long-term care premiums

The limits under Section 213(d) for eligible long-term care premiums that qualify as medical expenses for tax years beginning in 2022 (compared with 2021) are shown below, based on attained age before the close of the taxable year.

2022 2021
Age 40 or younger $450 $450
> 40 but < 50 $850 $850
> 50 but < 60 $1,690 $1,690
> 60 but < 70 $4,510 $4,520
> 70 $5,640 $5,640

Health savings accounts

The 2022 limits for contributions to health savings accounts and for high-deductible health plans were released earlier this year. (See our May 13, 2021 FYI.)

In closing

Our For Your Reference, a one-page overview of health, retirement and other benefit plan limits and various key social security and Medicare figures, will be available shortly from your consultant.

2021 Reporting and Disclosure (R&D) Guide

Now available to help you meet your employee benefit R&D obligations, download the latest edition of Buck’s Reporting and Disclosure Guide: Retirement and Welfare Benefit Plans.

Volume 44 | Issue 40