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IRS announces some 2020 benefit plan limits

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The IRS has issued Revenue Procedure 2019-44, which contains 2020 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 2020 (compared with 2019) is:

2020

2019

Maximum salary reduction amount

$2,750

$2,700

Qualified transportation fringe benefits

The monthly limits under Section 132(f) for tax years beginning in 2020 (compared with 2019) are:

2020

2019

Commuter highway vehicle and transit pass

$270

$265

Qualified parking

$270

$265

Adoption assistance programs

For employer-provided adoption assistance programs, the maximum amount excludible from an employee’s income in 2020 (compared with 2019) 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.

2020

2019

Excludible amount

$14,300

$14,080

Phase-out income thresholds
Phase-out begins

$214,520

$211,160

Phase-out complete

$254,520

$251,160

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 2020 (compared with 2019) are shown below, based on attained age before the close of the taxable year.

2020

2019

Age 40 or younger

$430

$420

> 40 but < 50

$810

$790

> 50 but < 60

$1,630

$1,580

> 60 but < 70

$4,350

$4,220

> 70

$5,430

$5,270

Health savings accounts

The 2020 limits for contributions to health savings accounts and for high-deductible health plans were released earlier this year. (See our May 30, 2019 For Your Information.)

In closing

Our For Your Reference, a wallet-sized booklet showing retirement plan and other benefit limits and various key Social Security and Medicare figures, will be available shortly from your consultant.


Volume 42 | Issue 95

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