07 November 2019 IRS releases fringe benefit inflation adjustments for 2020 Medical Savings Account (MSA) limits go up in 2020 Summarized below are the 2020 limits that apply to MSAs under IRC Section 220(c)(2)(A). Provision | Self-only coverage | Family coverage | High deductible health plan: annual deductible | Not less than $2,350 (unchanged from 2019) and not more than $3,550 (up from $3,500 in 2019) | Not less than $4,750 (up from $4,650 in 2019) and not more than $7,100 (up from $7,000 in 2019) | Annual out-of-pocket (other than for premiums) | Not to exceed $4,750 (up from $4,650 in 2019) | Not to exceed $8,650 (up from $8,550 in 2019) |
Adoption assistance limit goes up in 2020 The limit on qualified adoption assistance (including special needs children) under IRC Section 23(a)(3) for 2019 is $14,300, up from $14,080 in 2019. For 2020, the amount excludable from an employee's gross income begins to phase out under IRC Section 137(b)(2)(A) for taxpayers with modified adjusted gross income in excess of $214,520 and is completely phased out for taxpayers with modified adjusted gross income of $254,520 or more. Health flexible spending account (FSA) limit goes up in 2020 The 2020 annual limit on the amount of pretax contributions employees can make toward their health flexible spending account through a cafeteria plan under IRC Section 125(i) is $2,750, up from $2,700 in 2019. Transportation fringe benefits (parking and transit) increases in 2020 The 2020 monthly limit on parking benefits under IRC Section 132(f)(2)(B) is $270, up from $265 in 2019. The 2020 aggregate monthly limit for transportation in a commuter highway vehicle and any transit pass under IRC Section 132(f)(2)(A) is also $270, an increase from $265 in 2019. Foreign earned income exclusion for 2020 For taxable years beginning in 2020, the foreign earned income exclusion amount under IRC Section 911(b)(2)(D)(i) is $107,600. Reporting penalties for Forms W-2/1099 increase in 2021 The penalties that apply to late of incorrect Forms W-2 is indexed each year for inflation. Following are the penalties that apply to late or incorrect Forms W-2 required to be furnished to employees and/or filed with the Social Security Administration in 2021. Section 6721 Failure to timely file an accurate information return with IRS (for returns required to be filed in 2021) | Filed/Corrected | | | | On or After | On or Before | Penalty | Maximum | Max.small employer | 1/1 | 1/31 | $0 | N/A | N/A | 2/1 | 2/28 | $50 | $565,000 | $197,500 | 3/1 | 8/1 | $110 | $1,696,000 | $565,000 | 8/1 | | $280 | $3,392,000 | $1,130,500 | | | intentional disregard | $560 | no limit | no limit |
Section 6722 Failure to timely furnish an accurate employee statement (for returns required to be filed in 2021) | Filed/Corrected | | | | On or After | On or Before | Penalty | Maximum | Max.small employer | 1/1 | 1/31 | $0 | N/A | N/A | 2/1 | 2/28 | $50 | $565,000 | $197,500 | 3/1 | 8/1 | $110 | $1,696,000 | $565,000 | 8/1 | | $280 | $3,392,000 | $1,130,500 | | | intentional disregard | $560 | no limit | no limit |
Contact Information
For additional information concerning this Alert, please contact: Workforce Tax Services - Employment Tax Advisory Services ———————————————
ATTACHMENT Document ID: 2019-6391 |
