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MAX your Pre-Tax

Updated: Jan 9, 2019

On November 15, 2018 the IRS announced an increase to the allowable Flexible Spending Account (FSA) Contribution for 2019 (Revenue Procedure 2018-57). In general the IRS normally makes their announcement in October and now that employers are in the midst of their enrollment season, what can employers and employees expect.

2019 FSA Contribution Limit

For 2019 the FSA contribution limit is increasing by $50.00 from $2,650 to $2,700. This change affects both health FSAs and Limited Purpose FSAs.

Note that the Dependent Care FSA limit remains unchanged at $5,000.

Additional Tax Exclusion Changes

In addition to the health care FSA limit change, the IRS also announced the following adjustments for taxable year 2019:

  • Transit and parking employee benefits: Monthly limit on fringe benefit exclusion for transit and parking for 2019 was increased to $265 from the 2018 limit of $260.

  • Retirement plans: The 2019 maximum contribution limit for employees contributing to a 401(k), 403(b) or 457 plan has been adjusted to $19,000, an increase of $500 from the 2018 limit.

  • Adoption assistance programs: The maximum yearly exclusion for qualified adoption expenses in taxable year 2019 will be $ $14,080, up from $13,840 for 2018.

  • QSEHRA: The maximum reimbursement for a qualified small employer health reimbursement arrangement (QSEHRA) for 2019 has been set to $5,150 for individual coverage and $10,450 for family coverage. QSEHRA limits for 2018 were $5,050 for individual coverage and $10,250 for family coverage.

Disclaimer: AJM Associates does not provide tax or legal advice. This information is not intended and should not be taken as tax or legal advice. Any tax or legal information in this notice is merely a summary of AJM Associates' understanding and interpretation of some of the current tax regulations and is not exhaustive. You should consult your tax advisor or legal counsel for advice and information concerning your particular situation before making any decisions.

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