Each year, HR professionals await updates regarding the limits the IRS allows for certain tax-free benefits. We can calm our loins now as the long-awaited information is here! Employers that offer certain tax impacted benefits will want to read below.
Employee Contribution Limit for 2021 - $19,500
Additional Catch Up Contribution of $6,500 for employees 50 or older
Health FSA Limit
Employee Election for 2021 - $2,750
Rollover Limit for 2021 - $550
Dependent Care FSA Limit
Employee Election for 2021 - $5,000 (individuals or married couples filing jointly), $2,500 for a married person filing separately
HSA Contribution Limit
Employee Contribution Limit for 2021 - $3,600 (ee only), $7,200 (family)
What Do You Need To Do?
If you provide employees with any of the benefits above, you’ll want to ensure employees are aware of the new limits. The new year is always a good time for employees to take a look at their contributions AND their beneficiaries and update if needed.