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November 4, 2014

2015 Benefit Plan Limits (article)

In Revenue Procedure 2014-61, the IRS released 2015 inflationary or cost of living adjustments relating to several types of benefits, as follows. 

 

Small Business Tax Credit.  The small business tax credit (SBTC) phases out for eligible small employers when the number of its full-time employees (FTEs) exceeds 10; or, when the average annual wages for the FTEs exceeds $25,800 in the 2015 tax year (the phase-out wage limit for 2014 was $25,400). As a reminder, only qualified health plan coverage purchased through a SHOP marketplace is available for the SBTC, and only for a 2-consecutive year period.

FSA Cap.  The amount that can be contributed to a health flexible spending account (FSA) through voluntary salary reductions in 2015 is increased to $2,550, up from $2,500 in 2014.

Qualified Transportation Fringe BenefitsIn 2015, the transportation expenses reimbursed by an employer and excludable from the employee’s income under a qualified transportation program remain unchanged from the 2014 limits:

 

 

2014

2015

Commuter Highway Vehicle (van pooling) and

Any Transit Pass

$130

$130

Qualified Parking

$250

$250

 

As a reminder, employees who use their bicycles for traveling between home and their place of employment are entitled to receive a reimbursement of up to $20 per month ($240 annually) for qualified bicycle expenses. This limit is not indexed nor tied to a cost of living adjustment.

 

Qualified Adoption Assistance Reimbursement Program (IRC §137).  An employer-provided adoption assistance program that meets the qualifications of IRC §137, allows participants to recover expenses relating to adoption, such as reasonable adoption fees, court costs, attorney’s fees and traveling expenses.  Below are the exclusion limits and AGI phase-out limits for 2014 and 2015:

 

 

2014

2015

Exclusion Limit

$13,190

$13,400

AGI Phase-out Limits

Between $197,880 and $237,880

Between $201,010 and $241,040

 

Health Savings Accounts.  Please note that the 2015 annual limits applicable to health savings accounts were released earlier this year (see IRS issues 2015 HSA Limits and Other Cost-Sharing Matters, Benefit Beat, 5/8/14).

 

Archer Medical Savings Accounts.  The Archer MSA pilot project ended on December 31, 2007; therefore, no new MSAs could be established after that date.  For existing MSAs, the annual deductible limit of a HDHP and out-of-pocket expense limit in an Archer medical savings account for 2015 are slightly increased:

 

 

2014

2015

Single

Family

Single

Family

HDHP Annual Deductible

 

Between $2,200 and $3,250

Between $4,350 and $6,550

Between $2,200 and $3,300

Between $4,450 and $6,650

Out-of-Pocket Expenses

$4,350

$8,000

$4,450

$8,150

 

Long-Term Care Premiums.  The IRS limitations relating to eligible long-term care premiums includible as medical care, as defined by IRC §213(d) are:

 

Age at end of tax year

2014 Premium Limit

2015 Premium Limit

<40

$370

$380

>40 but <50

$700

$710

>50 but <60

$1,400

$1,430

>60 but <70

$3,720

$3,800

>70

$4,660

$4,750

 

Premium Tax Credit for Coverage under a Qualified Health Plan.  Individuals who buy coverage through the marketplace and meet certain income criteria may be eligible for an advance credit payment wherein a portion of the premium is made directly to the insurer to cover the cost of coverage.  The amount of an individual’s premium tax credit is reduced by the amount of any advance credit payments made during the year.  If the advance credit payment for a taxable year exceeds the premium tax credit limit, the individual would owe the excess as additional tax, subject to certain inflationary limits.  For tax years beginning in 2015, the limitation on tax imposed for excess advance credit payments is determined using the following table:

 

Household Income

(as percent of poverty line)

Limitation amount for unmarried individuals

(other than surviving spouse and head of household)

Limitation amount for all other taxpayers

Under 200%

$300

$600

Between 200% and 300%

$750

$1,500

Between 300% and 400%

$1,250

$2,500

 

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

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