The Internal Revenue Service (IRS) recently announced annual inflation adjustments for 2018. Revenue Procedure 2017-58
provides details about these annual adjustments. It includes the 2018 limits for Health Care Flexible Spending Accounts (FSAs),
Limited Purpose FSAs, Adoption Assistance, Transit/Vanpool and Parking benefits. These limits are effective January 1, 2018.
Health Care FSAs and Limited Purpose FSAs
The 2018 pretax contribution limit for Health Care FSAs and Limited Purpose FSAs is
. This is a $50 increase over the 2017 limit.
Adoption Assistance (updated March 5, 2018)
If you adopt an eligible child, you may be eligible to receive up to
tax-free, from your employer. This benefit can help you pay for qualified adoption expenses. But it begins to phase out if you have a Modified Adjusted Gross Income (MAGI) greater than $207,140. And it completely phases out if you have a MAGI of $247,140 or more.
Transit/Vanpool and Parking
The 2018 combined pretax contribution limit for transit/vanpool expenses is $260 per month
. The pretax parking limit is $260 per month
This is a $5 increase over the 2017 limits.
Employers are not required to adopt these new limits. They can set lower limits for their plans.