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
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.
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.