News alert: IRS releases 2021 cost-of-living adjustments for certain tax provisions

On Monday, Oct. 26, the IRS released 2021 cost-of-living increases for inflation for certain benefit accounts, retirement plans and other programs.

Limits that have not changed

• Voluntary employee salary reduction contributions to a health flexible spending arrangement: remains $2,750
• Monthly fringe benefit exclusion for transit and parking: remains $270
• Maximum contribution for employees contributing to a 401(k), 403(b) or 457 plan: remains $19,500

Limits that have increased

• Maximum exclusion for qualified adoption expenses furnished pursuant to an adoption assistance program: $14,440 (up from $14,300)
• Maximum reimbursement from a qualified small employer health reimbursement arrangement (QSEHRA): $5,300 for individual coverage (up from $5,250) and $10,700 for family coverage (up from $10,600)

Read Procedure 2020-45 for changes to benefit accounts.
Read Notice 2020-79 for changes to retirement plans.