IRS Announces 2021 Health FSA & Qualified Transportation Limits

In Revenue Procedure 2020-45, the IRS sets forth a variety of 2021 adjusted tax limits. Among other things, the notice indicates that employee contribution limits toward health flexible spending arrangements (FSAs) and qualified transportation fringe benefits are unchanged for 2021. The limit on annual employee contributions toward health FSAs for 2021 is $2,750, with the ability to carryover up to $550. The limit on monthly contributions toward qualified transportation and parking benefits for 2021 remains at $270. The full text of Rev. Proc. 2020-45, including 2021 amounts and limitations for other taxes, may be found at  https://www.irs.gov/pub/irs-drop/rp-20-45.pdf

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