Blog

2021 Benefit Limits Announced

2021 Benefit Limits Announced

The Internal Revenue Service released new 2021 benefit limits on October 27. The annual inflation adjustments show more than 60 tx provisions for the new year. However, several employee benefit limitation amounts will remain the same for 2021. We are here to provide a list of changes and a list of what will stay the same.

2021 Tax Limit Changes:

  • The adoption credit, or the amount excluded for adoption assistance, allowed for an adoption of a child with special needs increase to $14,440.
  • The amount for employee health insurance expenses of small employers increases to $27,800 (used for the tax credit).
  • Limitation regarding eligible long-term care premiums, including "medical care," increase as follows:
Attained age before the close of the taxable year Maximum deduction for year
40 or less $450
More than 40 but not more than 50 $850
More than 50 but not more than 60 $1,690
More than 60 but not more than 70 $4,520
More than 70 $5,640
  • The deductible and OOP limits for HDHPs are as follows:
    • For self-only coverage, a health plan that has an annual deductible that is not less than $2,400 and not more than $3,600, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,800.

    • For self-only coverage, a health plan that has an annual deductible that is not less than $2,400 and not more than $3,600, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,800.

  • The dollar amount of payments and reimbursements for any year under a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) cannot excced:
    • $5,300 for an individual
    • $10,700 for families

What stays the same?

  • FSA annual limit on employee contributions remains at $2,750
  • The qualified limitations for commuter benefits remain at $270
  • The monthly limit for qualified parking remains at $270

For the full report from the IRS click here. If you have any questions about these changes and how they affect your employee benefits please contact us. We are happy to help!