On October 22, 2024, the Internal Revenue Service announced inflation-adjusted amounts for more than 60 sections of the Internal Revenue Code. Of particular interest to employers that sponsor employee benefit arrangements are the following:

Flexible Spending. For taxable years beginning in 2025, the limit for health flexible spending arrangements is $3,300. If the cafeteria plan permits carryover of unused amounts, the maximum carryover amount is $660.

Qualified Transportation Fringe Benefit. For taxable years beginning in 2025, the monthly limit for transportation in a commuter highway vehicle and any transit pass is $325. The monthly limit for qualified parking is $325.

Adoption Assistance Programs. For taxable years beginning in 2025, taxpayers may exclude up to $17,280 for the adoption of a child with special needs. Also, for taxable years beginning in 2025, this same amount may be excluded from an employee’s gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program.

Medical Savings Accounts. For taxable years beginning in 2025, the term “high deductible health plan” means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,850 and not more than $4,300, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $5,700. For taxable years beginning in 2025, the term “high deductible health plan” means, for family coverage, a health plan that has an annual deductible that is not less than $5,700 and not more than $8,550 and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $10,500.

 *           *           *

If you have questions or would like additional information, please contact our Employee Benefits & Executive Compensation attorneys or the primary EGS attorney with whom you work.