The Internal Revenue Service (IRS) recently announced annual inflation adjustments for 2017. Revenue Procedure 2016-55
provides details about these annual adjustments. It includes the 2017 limits for Health Care Flexible Spending Accounts (FSAs),
Limited Purpose FSAs, Adoption Assistance, Transit/Vanpool and Parking benefits. These limits are effective January 1, 2017.
Health Care FSAs & Limited Purpose FSAs
The 2017 pretax contribution limit for Health Care FSAs and Limited Purpose FSAs is
This is a $50 increase over the 2016 limit.
If you adopt an eligible child, you may be eligible to receive up to
tax-free, from your employer. This is a $110 increase from the 2016 limit. This benefit can help you pay for qualified adoption expenses. But it begins to phase out if you have a Modified Adjusted Gross Income (MAGI) greater than $203,540. And it completely phases out if you have a MAGI of $243,540 or more.
Transit/Vanpool and Parking
There are no changes to the transit/vanpool and parking limits. The 2017 combined pretax
contribution limit for transit/vanpool expenses is $255 per month
. The pretax parking limit is $255 per month
Employers are not required to adopt these new limits. They can set lower limits for their plans.