It’s that time of year! The Internal Revenue Service (IRS) has officially announced the 2020 limits for health care flexible spending accounts (FSAs), commuter benefits (also known as qualified transportation fringe benefits), and adoption assistance. In making contribution limit decisions, the IRS annually takes into account cost of living increases due to inflation.
IRS 2020 Limits
For more information, you can visit the IRS site here.
Why This Is Good News for Employers and Employees
Although the limit increase may seem small, the benefits can add up for both employers and their employees. For employers, these annual increases in contribution limits can help ensure that FSAs, commuter benefits, and adoption assistance programs remain an attractive addition to their benefits package, which can be used to recruit and retain valuable talent. Employers can also save on their payroll taxes when employees take advantage of these benefits.
For employees, this 2020 limit increase allows them to set aside even more tax-free money to pay for items and services they need every day, and in the meantime, reduce their taxable income.
Do you have questions on this 2020 limit increase? Contact us at firstname.lastname@example.org.