November 6, 2019

The IRS released Revenue Procedure 2019-44, which provides the 2020 cost-of-living increases for certain plans. Below please find the updated contribution amounts effective January 1, 2020.

Flexible Spending Accounts

Health FSA 

For 2020, the dollar limitation on employee salary reduction contributions to a Health Flexible Spending Account will increase by $50 to $2,750 per plan year. 

Adoption Assistance FSA

The maximum amount that may be excluded from an employee's gross income under an employer-provided adoption assistance program for the adoption of a child will increase to $14,300 for 2020.

Qualified Small Employer Health Reimbursement Arrangement

To qualify as a qualified small employer Health Reimbursement Arrangement, the total amount of payments and reimbursements cannot exceed $5,250 for single coverage and $10,600 for family coverage.

Commuter Plan - Parking & Transit Account

The maximum monthly contribution amount for both the Parking and Transit Accounts will increase by $5 to $270 for 2020.

Retirement Plans

For 401(k), 403(b) and most 457 plans, the 2020 elective deferral limit will increase to $19,500. The catch-up contribution limit for employees ages 50 and over who participate in 401(k), 403(b), and most 457 plans will increase to $6,500.

For IRAs, the contribution limit and the catch-up contribution remains unchanged. For 2020, the IRA annual contribution continues at $6,000 and the catch-up contribution limit continues at $1,000.

The limitation used in the definition of highly compensated employees for 2020 will increase from $125,000 to $130,000.