The IRS announced the cost-of-living increases for 2021 in Procedure 2020-45. Below is an overview of what changed and what remains the same for the new year.
Flexible Spending Accounts
For the 2021 plan year, the dollar limitation on employee salary reduction contributions to a Health Flexible Spending Account will remain $2,750 per plan year.
Adoption Assistance FSA
The maximum amount that may be excluded from an employee's gross income under the adoption assistance program will increase to $14,440 for 2021.
Commuter - Parking & Transit
The maximum monthly contribution amount for both the parking and transit accounts will remain $270 for 2021.
For 401(k), 403(b), and 457 plans the 2021 elective deferral limit will remain $19,500 for 2021. Catch-up contributions for participants 50 and over will also remain the same at $6,500.
For IRAs, the limit on annual contributions remains unchanged at $6,000.