Important Plan Updates for 2014 - Plan Election Limits
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Flexible Spending Accounts
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On October 31, 2013, the IRS released Rev. Proc. 2013-35 (see below) with the latest 2014 Inflation Adjustments for Flexible Spending Accounts (FSA), Transportation, and Adoption Assistance Benefits.
For more details see
Revenue Procedure 2013-35
Dictates employee contribution limit of $2,500 will remain unchanged for 2014 plan year.
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In addition to FSA inflation adjustments, the IRS also released IR-2013-86 with the 2014 Retirement Plan Dollar Thresholds.
- Health Flexible Spending Accounts (FSAs) - Maximum employee contribution: $2,500 (no change from 2013)
- Dependent Care Flexible Spending Accounts (DCAs) - Maximum employee contribution: $5,000 (no change from 2013)
- Notice 2013-71 introduces major changes to the current "use-or-lose" rule, which results in the forfeiture of any unused funds at the end of each health FSA plan year. Under the new rule, employers may allow participating employees to carry over unused funds up to $500 to the next plan year, assuming the employer's plan does not include the grace period extension.
- Qualified Parking Benefits - Monthly maximum employee contribution: $250 (a $5 increase from 2013)
- Qualified Transit Passes and Van-Pooling Benefits - Combined monthly limit for transit passes and van-pooling expenses: $130 (a $115 decrease from the 2013 limit)
- Adoption Assistance Exclusion and Adoption Credit
- Maximum employee contribution: $13,190 (increase of $220)
- Maximum adoption credit: $13,190
- Exclusion and credit will begin to phase out for individuals with modified adjusted gross incomes greater than $197,880 and entirely phased out for individuals with modified adjusted gross incomes of $237,800+ (these income levels are $3,300 higher than in 2013)
- Highly Compensated Employee (HCE) Threshold: $115,000 (no change from 2013)
Key Employee Threshold: $170,000 (up from $165,000)
Information brought to you by:
DRA
Employee Benefits Dept.
T: 510.465.3090
License# 0020739
Send questions to:
DRA Employee Benefits
For more information on Los Angeles employee benefits, contact Dealey, Renton & Associates at 626.844.3070.