The IRS and Social Security Administration released the 2015 cost-of-living (COLA) adjustments that apply to health flexible spending accounts (FSAs) in Revenue Procedure 2014-61. The new annual limit for health FSAs, including general-purpose and limited-purpose health FSAs, is $2,550 for plan years starting on or after January 1, 2015.
The $2,550 limit is prorated for short plan years (plan years that are shorter than 12 months) and any carry over amount from participants' previous plan years may be added to the limit. For instance, participants may elect $2,550 for the 2015 plan year and carry over a maximum of $500 from the previous plan year, making their total account value $3,050 for the 2015 plan year.Â In other words, the $500 carryover does not count against or affect the $2,550 salary reduction limit.
Employers may also make non-elective contributions to participants' accounts. Special rules apply to employer contributions. Please talk with your Relationship Manager if you have questions concerning employer non-elective contributions.
For 2015, the Adoption Credit increases from $13,190 to $13,400. The credit starts to phase out at $201,010 of modified adjusted gross income (AGI) levels and is completely phased out when modified AGI reaches $241,010.
The monthly limit for Commuter Accounts will remain the same as the 2014 monthly amounts in 2015 at $250 for qualified parking and $130 for transit expenses.
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