On November 6, 2019 the Internal Revenue Service announced that the inflation-adjusted contribution limit for medical flexible spending accounts, including limited purpose (FSAs), will go up by $50 to $2750 for plans starting on or after January 1, 2020. The contribution limit for dependent care FSAs (DCA) will remain the same for 2020, with an annual limit of $5000 per household or $2500 if married filing single.
Healthcare FSA
|
2017 |
2018 |
2019 |
2020 |
|
|
Salary Reduction Annual Limit |
$2,600 |
$2,650 |
$2,700 |
$2,750 |
The Internal Revenue Service (IRS) and Social Security Administration have released the cost-of-living (COLA) adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index rose and therefore warranted increases in most indexed figures for 2020.
Social Security and Medicare Wage Base
For 2020, the Social Security wage base is $137,700. The Social Security rate of 6.2% is applied to wages up to the maximum taxable amount for the year; the Medicare portion of 1.45% applies to all wages. In addition, individuals are liable for a 0.9 percent “Additional Medicare Tax” on all wages exceeding specific threshold amounts.
|
2017 |
2018 |
2019 |
2020 |
|
|
Social Security Wage Base |
$127,200 |
$128,400 |
$132,900 |
$137,700 |
|
Employee Social Security Rate |
6.2% |
6.2% |
6.2% |
6.2% |
|
Employee Medicare Rate |
1.45% |
1.45% |
1.45% |
1.45% |
|
Total Employee Rate |
7.65% |
7.65% |
7.65% |
7.65% |
|
Employer Matching Rate |
7.65% |
7.65% |
7.65% |
7.65% |
Health Savings Account (HSA)
|
2017 |
2018 |
2019 |
2020 |
|
|
Minimum deductible amounts for the qualifying high-deductible health plan (HDHP) |
||||
|
Individual Coverage |
$1,300 |
$1,350 |
$1,350 |
$1,400 |
|
Family Coverage |
$2,600 |
$2,700 |
$2,700 |
$2,800 |
|
Maximum contribution levels |
||||
|
Individual Coverage |
$3,400 |
$3,450 |
$3,500 |
$3,550 |
|
Family Coverage |
$6,750 |
$6,900 |
$7,000 |
$7,100 |
|
Catch up allowed for those 55 and over |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
|
Maximums for HDHP out-of-pocket expenses |
||||
|
Individual Coverage |
$6,550 |
$6,650 |
$6,750 |
$6,900 |
|
Family Coverage |
$13,100 |
$13,300 |
$13,500 |
$13,800 |
401(k) Plans
|
2017 |
2018 |
2019 |
2020 |
|
|
Maximum Employee Deferral |
$18,000 |
$18,500 |
$19,000 |
$19,500 |
|
Catch up allowed for those 50 and over |
$6,000 |
$6,000 |
$6,000 |
$6,500 |
Alongside retirement savings, employees approaching 50 or 60 should also review their life and disability insurance to ensure their financial protection keeps pace with their planning.
You can find the Revenue Procedures here.
Cost of Living Adjustment (COLA) information.
