PHONE: 208.277.1047 ||
CORPORATE HEADQUARTERS:
COEUR D’ALENE, IDAHO

NEWS
AND INFORMATION
PEAK ONE ADMINISTRATION

IRS Releases 2021 Cost of Living Adjustments for Certain Tax Provisions

Yesterday, the IRS released IRS Revenue Procedure 2020-45 which provides the 2021 cost-of-living increases for inflation for certain items. In addition, the IRS also released today Notice 2020-79 which provided the 2021 COLA increases for retirement plans, including 401(k) plans.  

 Taxable Years Beginning in 2021Taxable Years Beginning in 2020
Limit on voluntary employee salary reduction contributions to a health flexible spending arrangement (Section 3.17 of Rev. Proc. 2020-45)$2,750$2,750
Monthly limit on fringe benefit exclusion for transit and parking (Section 3.18 of Rev. Proc. 2020-45)$270$270
Maximum exclusion for qualified adoption expenses furnished pursuant to an adoption assistance program (Section 3.20 of Rev. Proc. 2020-45)$14,440$14,300
Maximum reimbursement from a qualified small employer health reimbursement arrangement (QSEHRA) (Section 3.62 of Rev. Proc. 2020-45)$5,300 ($10,700 for family coverage)$5,250 ($10,600 for family coverage)
Maximum contribution limit for employees contributing to a 401(k), 403(b) or 457 plan (Notice 2020-79)$19,500$19,500