Last week the Internal Revenue Service (IRS) released Revenue Procedure 2019-44, which increased the deduction for health Flexible Spending Accounts (FSAs) by $50 to $2,750 for plan years beginning in 2020. The IRS released revenue procedure also contains cost-of-living-adjustments that apply to dollar limitations in certain sections of the Internal Revenue Code.
Among them:
- Qualified Commuter Parking and Mass transit Pass Monthly Limit Increase – the monthly limits for qualified parking and mass transit are up $5 from 2019 to $270 each.
- Adoption Assistance Tax Credit Increase – The credit allowed for adoption of a child has been increased by $220 to $14,300 for 2020. The credit phases out for taxpayers with modified adjusted gross income of more than $214,520, which is $3,360 higher than in 2019. Taxpayers whose modified adjusted gross income exceeds $254,000 are not eligible for the tax credit.
- Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Increase – The reimbursements for QSEHRA for 2020 have increased by $100 for single filers and $150 for family, to $5,250 and $10,600 respectively.