Finance News & Insights

IRS blitzes with new benefit limits for 2019

More mission-critical year-end updates have arrived! And these impact many of your different finance departments, from Payroll to Accounts Payable to Benefits.

IRS Revenue Procedure 2018-57 announces the cost of living adjustments for 2019.

And they’re all up over last year’s limits. Granted, some of these benefits may not be used as often as others, but the lesser-tapped ones can prove hugely beneficial in retaining employees.

Check out the benefit limits for 2019 so you and your entire team are prepared come Jan. 1:

  • FSAs. The dollar limitation for voluntary employee salary reductions for contributions to health FSAs will be $2,700 (up $50 over 2018).
  • Qualified transportation limits. The monthly limit that may be excluded from an employee’s income for qualified parking benefits will increase to $265 (up $5 from 2018). The combined monthly limit for transit passes and van-pooling expenses will also be $265 (up $5 from 2018).
  • Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs). The maximum amount of payments and reimbursements under a QSEHRA cannot exceed $5,150 for individual coverage and $10,450 for family coverage (a $100 and $200 increase from 2018, respectively).
  • Adoption assistance exclusion and adoption credit. The maximum amount that may be excluded from an employee’s gross income under an employer-provided adoption assistance program rises to $14,080 (up $270 from 2018). In addition to this increase, the maximum adoption credit allowed to an individual for the adoption of a child will also be $13,840 (a $270 increase from 2018). Both the exclusion and the credit will begin to be phased out for individuals with modified adjusted gross incomes greater than $211,160 and will be entirely phased out for individuals with modified adjusted gross incomes of $251,160 or more.
  • Small business health care tax credit. The average annual wage level at which the tax credit begins to phase out for eligible small employers will rise to $27,100 (up $500 from 2018). The maximum average annual wages to qualify for the credit as an “eligible small employer” will be $54,200 (an increase of $1,000 from 2018).
  • Archer MSAs. For Archer MSA-compatible high-deductible health coverage, the annual deductible for self-only coverage must be between $2,350 ($50 over 2018) and $3,500 (up $50 from 2017), with an out-of-pocket maximum of $4,650 ($50 increase from this year). For family coverage, the annual deductible must be between $4,650 (up $50 from 2018) and $7,000 (up $150 from 2018), with an out-of-pocket maximum of $8,550 ($150 increase from 2018).

And of course you can always tap our year-end checklist to make sure your team is staying on track.

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