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IRS Announces Benefit Plan Limits for 2021

The Internal Revenue Service (IRS) has released all benefit plan limits for the 2021 calendar year.

These limits are adjusted for inflation on an annual basis. In some cases, limits are the same as those in the calendar year 2020.

Benefit

Category

2020

2021

Change

Medical Flexible Spending Account (FSA) Per Employee $2,750 $2,750 No Change
Medical FSA Carryover Limit Per Employee $550 $550 No Change
Dependent Care FSA Per Family $5,000
($2,500 if filing separately)
$5,000
($2,500 if filing separately)
No Change
Health Savings Account (HSA) Contribution Limit Self-Only
Family
$3,550
$7,100
$3,600
$7,200
$50 Increase
$100 Increase
HSA Catch-up (Age 55+) Per Employee $1,000 $1,000 No Change
HSA-High Deductible Health Plan (HDHP) Min. Deductible Self-Only
Family
$1,400
$2,800
$1,400
$2,800
No Change
No Change
HSA-HDHP Out-of-Pocket Maximum Self-Only
Family
$6,900
$13,800
$7,000
$14,000
$100 Increase
$200 Increase
401(k) Plan Limit Per Employee $19,500 $19,500 No Change
401(k) Catch Up (Age 50+) Per Employee $6,500 $6,500 No Change
Adoption Assistance Programs Per Child $14,300 $14,400 $100 Increase
Social Security Wage Base Per Employee $137,700 $142,800 $5,100 Increase
Qualified Transportation Per Employee $270/Month $270/Month No Change
Parking Benefit Per Employee $270/Month $270/Month No Change

Action Steps

  • Update benefit plan designs for the new limits and make sure that plan administration will be consistent with the new limits in 2021.
  • Communicate the new benefit plan limits to employees.

Looking to view the latest retirement plan benefits adjustments? Check out the 2021 Financial Bulletin for the limit changes that may impact your employees.

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