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2022 Index Figures
November 11, 2021
The following general summary is intended to educate employers and plan sponsors on the potential effects of recent government guidance on employee benefit plans. This summary is not and should not be construed as legal or tax advice. The government’s guidance is complex and very fact specific. As always, we strongly encourage employers and plan sponsors to consult competent legal or benefits counsel for all guidance on how the actions apply in their circumstances.
On November 10, 2021, the Internal Revenue Service issued1 the 2022 annual inflation adjustments for many tax provisions of the IRS Code. These adjusted amounts will be used to prepare tax year 2022 returns in 2023. Also, on November 4, the IRS released2 the dollar limitations for qualified retirement plans for tax year 2022, including 401(k) plans.
Indexed Compensation Levels
For highly compensated and Key Employee definitions:
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Highly Compensated Employee | $135,000 | $130,000 | $125,500 | |
| Key Employee | $200,000 | $185,000 | $180,000 | |
401(k), 403(b), or 457 Plans
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Maximum Employee Contribution | $20,500 | $19,500 | $19,000 | |
| Maximum Catch-Up Allowed 50+ | $6,500 | $6,000 | ||
Health Flexible Spending Account (FSA)
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Annual Salary Reduction Limit | $2,85 | $2,750 | $2,700 | |
As a reminder, Healthcare FSAs that permit the carryover of unused amounts, the maximum carryover amount is increased to an amount equal to 20 percent of the maximum health FSA salary reduction contribution for that plan year. Accordingly, the maximum carryover amount from a plan year beginning in 2022 to be carried over to the immediately subsequent plan year beginning in 2023 is $570 (= $2,850 * 20%).3
Dependent Care Assistance Program (DCAP)
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Maximum DCAP Amount | ||||
| Unless Married Filing Separately | $5,000 | |||
| If Married Filing Separately | $2,500 | |||
| Deemed Income of Spouse Incapable of Self-Care or Full-Time Student | ||||
| With 1 Qualifying Individual | $250/month | |||
| With 2 or More Qualifying Individuals | $500/month | |||
*While the $5,000/$2,500 DCAP limit has not changed, the maximum amount of DCFSA benefits permitted for income exclusion was temporarily increased to $10,500 (or $5,250 for married taxpayers filing separately) for the 2021 taxable year only4 and will return to $5,000/$2,500 for 2022 and subsequent years unless Congress acts.
There are adjustments to some of the general tax limits that are relevant to the federal income tax savings under a DCAP. These include the 2022 tax rate tables, earned income credit amounts, and standard deduction amounts. The child tax credit limits are also relevant when calculating the federal income tax savings from claiming the dependent care tax credit (DCTC) versus participating in a DCAP.
Commuter Accounts
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Parking – Monthly Limit | $280 | $270 | $265 | |
| Transit and Vanpooling – Monthly Limit | $280 | $270 | $265 | |
Adoption Assistance Exclusion and Adoption Credit
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Phase Out (modified Adjusted Gross Income) | $223,410 - $263,410 | $216,660 - $256,660 | $214,520 - $254,520 | $211,160 – 251,160 |
| Maximum Exclusion for EmployerProvided Adoption Assistance | $14,890 | $14,400 | $14,300 | $14,080 |
| Adoption Tax Credit Limit | $14,890 | $14,400 | $14,300 | $14,080 |
Health Savings Account (HSA) 5
| 20226 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Minimum deductible amounts for the qualifying high-deductible health plan (HDHP) | ||||
| Individual Coverage | $1,400 | $1,350 | ||
| Family Coverage | $2,800 | $2,700 | ||
| Maximum Contribution Levels | ||||
| Individual Coverage | $3,650 | $3,600 | $3,550 | $3,500 |
| Family Coverage | $7,300 | $7,200 | $7,100 | $7,000 |
| Catch-Up Allowed for Those 55+ | $1,000 | |||
| Maximums for HDHP Out-of-Pocket Expenses | ||||
| Individual Coverage | $7,050 | $7,000 | $6,900 | $6,750 |
| Family Coverage | $14,100 | $14,000 | $13,800 | $13,500 |
Excepted Benefit Health Reimbursement Arrangement (EBHRA)
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Maximum Newly Available Benefit Amount | $1,800 | N/A7 | ||
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Individual Coverage | $5,450 | $5,300 | $5,250 | $5,150 |
| Family Coverage | $11,050 | $10,700 | $10,600 | $10,450 |
Archer Medical Savings Account (MSA)
| 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Minimum/Maximum Deductible Amounts for the Qualifying High-Deductible Health Plan (HDHP) | ||||
| Individual Coverage | $2,450 - $3,700 | $2,400 - $3,600 | $2,350 - $3,550 | $2,350 - $3,500 |
| Family Coverage | $4,950 – 7,400 | $4,800 - $7,150 | $4,750 - $7,100 | $4,650 - $7,000 |
| Maximum Contribution Levels | ||||
| Individual Coverage – 65% of Deductible Amount | $2,405.00 | $2,340.00 | $2,307.50 | $2,275.00 |
| Family Coverage – 75% of Deductible Amount | $5,550.00 | $5,362.50 | $5,325.00 | $5,250.00 |
| Maximums for HDHP Out-of-Pocket Expenses | ||||
| Individual Coverage | $4,950 | $4,800 | $4,750 | $4,650 |
| Family Coverage | $9,050 | $8,750 | $8,650 | $8,550 |
- https://www.irs.gov/pub/irs-drop/rp-21-45.pdf
- https://www.irs.gov/pub/irs-drop/n-20-79.pdf
- https://www.irs.gov/pub/irs-drop/n-20-23.pdf
- https://www.healthequity.com/doclib/compliance/Compliance_Alert_American_Rescue_Plan_Act_COBRA_Subsidy_Final_3.12.2021.pdf
- https://www.wageworks.com/employers/employer-resources/compliance-briefing-center/regulatory-updates/2021/2022-hsa-index-figures-and-irs-guidance-on-tax-treatment-of-dependent-care-benefits-available-under-extended-claims-periods-or-carryover/
- https://www.irs.gov/pub/irs-drop/rp-21-25.pdf
- EBHRAs are only available for plan years beginning on or after January 1, 2020