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2015 Changes to FSA Limits and Other Tax-Related Items

Jan 12, 2015

HR360, Inc.
November 21, 2014

Various Tax Benefits Will Change in 2015 Due to Inflation Adjustments

The IRS has announc​ed a number of inflation-adjusted tax items for 2015. Items that may be of particular interest to employers and employees include the following:

  • Limit on Health Flexible Spending Arrangement (FSA) Contributions. The annual dollar limit on employee contributions to employer-sponsored health FSAs increases to $2,550 (up $50 from the amount for 2014).
  • Small Business Health Care Tax Credit. The maximum amount of the small business health care tax credit is phased out based on the employer's number of full-time equivalent employees in excess of 10 (unchanged from last year) and the employer's average annual wages in excess of $25,800 (up from $25,400 for 2014).
  • Qualified Transportation Fringe Benefits. The monthly limit on the value of the fringe benefit exclusion for transportation in a commuter highway vehicle and any transit pass remains unchanged at $130 . The monthly limit for qualified parking remains unchanged at $250 .
  • Medical Savings Accounts (MSAs). The 2015 limits for annual deductibles and the maximum out-of-pocket expenses for high deductible health plans (HDHPs) are as follows:
    • Self-only coverage. The minimum annual deductible remains unchanged at $2,200, while the maximum annual deductible increases to $3,300. The annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits cannot exceed $4,450.
    • Family coverage. The minimum annual deductible increases to $4,450, and the maximum annual deductible increases to $6,650. The annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits cannot exceed $8,150.
  • Earned Income Credit. The maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,143 for tax year 2014. IRS Rev​enue Procedure 2014-61 includes a table that provides maximum credit amounts for other categories, income thresholds, and phase-outs.

Details on these inflation adjustments and others are contained in Revenue Procedu​re 2014-61.

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