October 28, 2015

The IRS released inflation-adjusted items for 2016. The new limits are listed below:

Cafeteria Plans

For 2016, the dollar limitation on employee salary reduction contributions to a Health FSA will remain the same at $2,550 per plan year.  

Qualified Transportation Fringe Benefits

For 2016, the monthly limit on the amount that may be excluded from an employee’s income for the qualified parking benefits will increase by $5 per month to $255.

The combined monthly limit for the transit passes and vanpooling expenses for 2016 will remain at $130.

Adoption Assistance Programs

The maximum amount that may be excluded from an employee’s gross income under an employer-provided adoption assistance program for the adoption of a child will increase to $13,460 for 2016. The federal tax credit for adoption expenses also will increase to $13,460.

In 2016, the adoption credit will begin to phase out under § 23(b)(2)(A) for taxpayers with modified adjusted gross income over $201,920 and will be completely phased out for taxpayers with modified adjusted gross income of $241,920 or more.