2015 Changes to Health FSAs and Other Tax Benefits

The IRS has announced a number of inflation-adjusted tax items for 2015. Items that may be of particular interest to employers and employees include the following:

• Limit on Health Flexible Spending Arrangement (FSA) Contributions. The annual dollar limit on employee contributions to employer-sponsored health FSAs increases to $2,550 (up $50 from the amount for 2014).
• Small Business Health Care Tax Credit. The maximum amount of the small business health care tax credit is phased out based on the employer's number of full-time equivalent employees in excess of 10 (unchanged from last year) and the employer's average annual wages in excess of $25,800(up from $25,400 for 2014).
• Qualified Transportation Fringe Benefits. The monthly limit on the value of the fringe benefit exclusion for transportation in a commuter highway vehicle and any transit pass remains unchanged at $130. The monthly limit for qualified parking remains unchanged at $250.
• Earned Income Credit. The maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,143 for tax year 2014. IRS Revenue Procedure 2014-61 includes a table that provides maximum credit amounts for other categories, income thresholds, and phase-outs.