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November 7, 2019
IRS releases fringe benefit inflation adjustments for 2020
In Revenue Procedure 2019-44 the IRS announced the inflation adjustments that will apply to various fringe benefits in 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).
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.
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