October 18, 2022

The Internal Revenue Service announced in Revenue Procedure 2022-28 the annual inflation adjustments for more than 60 tax provisions for 2023, including the tax rate schedules, and other tax changes. This Revenue Procedure provides details about these annual adjustments:

There are several benefit limitations for 2023 included:

  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) is increased to $3,050.
  • If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is increased to $610.
  • The amount for the adoption credit or the amount excluded for adoption assistance allowed for an adoption of a child with special needs is increased to $15,950.
  • The dollar amount for employee health Insurance expense of small employers is increased to $30,700. This used for the tax credit.
  • The monthly limitation for qualified transportation fringe benefit regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is increased to $300. The monthly limit for qualified parking is also $300.
  • The limitations regarding eligible long-term care premiums includible in the term “medical care,” are increased as follows:

Attained Age Before the Close of the Taxable Year Limitation on Premiums:

40 or less

  • $480

More than 40 but not more than 50

  • $890

More than 50 but not more than 60

  • $1,790

More than 60 but not more than 70

  • $4,770

More than 70

  • $5,960

The deductible and out-of-pocket limits for “high deductible health plans” for Medical Savings Accounts are as follows:

    • For self-only coverage, a health plan that has an annual deductible that is not less than $2,650 and not more than $3,950, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $5,300.
    • For family coverage, a health plan that has an annual deductible that is not less than $5,300 and not more than $7,900, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $9,650.
    • The dollar total amount of payments and reimbursements for any year under a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) can not exceed $5,850 ($11,800 for family coverage).

For a copy of Revenue Ruling 2022-38 please click on the link below:

Click here!

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