The Internal Revenue Service has released the Cost-of-Living Adjustments (COLAs) for 2022. Many of the limits increased. Some of the notable 2022 limits for Health & Welfare Benefit Plans are:
- Health Care FSA maximum contribution limit increased to $2,850.
- Health Care FSA Carryover limit increased to $570*
- Transportation plans: transit and parking allowances increased to $280 per month.
- Adoption assistance program maximum excludable amount increased to $14,890.
- Adoption tax credit is increased to $14,890.
- HSA limits for 2022 were released in May. Limits increased except for the catch-up contribution.
IRS announcement of Health & Welfare limits:
*The carryover maximum limit applies in the following plan year. For example, the amount that can carry over into 2022 is $550
(20% of the 2021 Health FSA limit). The amount that can carry over into 2023 is $570 (20% of the 2022 Health FSA limit).
As we previously notified you, the retirement and pension plan limitations were released on November 4, 2021. Some of the most notable 2022 retirement and pension plan limitations are:
- 401(k) / 403(b) / 457 Contributions – increased to $20,500.
- 401(k) / 403(b) / 457 Catch-up Contributions – unchanged at $6,500.
- Compensation Limit – increased to $305,000.
- Defined Contribution Maximum Annual Contribution Limit – increased to $61,000.
- Defined Benefit Maximum Annual Benefit Limit – increased to $245,000.
- Highly Compensated Employees’ Compensation Limit – increased to $135,000.
- Key Employee Officer Compensation Limit – increased to $200,000.
IRS announcement of Retirement Plan limits:
Please feel free to contact us if you have any questions about any of the new Cost-of-Living Adjustments or Plan Limitations.
TRI-AD and our Associates’ suggestions or recommendations shall not constitute legal advice. No content on our website can be construed as tax or legal advice and TRI-AD may not be considered your legal counsel or tax advisor. Clients are encouraged to consult with their tax advisor and/or attorney to determine their legal rights, responsibilities, and liabilities. This includes the interpretation of any statute or regulation, federal, state, or local; and/or its application to the clients’ business activities.