IRS issues 2016 adjusted limits for various benefits,(Oct. 23, 2015)

In Rev. Proc. 2015-53, the Internal Revenue Service provides a variety of inflation-adjusted figures for 2016, including figures for cafeteria plans, long-term care, medical savings accounts (MSAs) and transportation fringe benefits.

Cafeteria plans. For the taxable year beginning in 2016, the dollar limitation under Code Sec. 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is unchanged from 2015, at $2,550.

Long-term care. For tax years beginning in 2016, the limits under Code Sec. 213(d)(10) for eligible long-term care premiums deductible as “medical care,” based on the insured’s age before the close of the taxable year, are as follows:

• for those age 40 or younger, the limit is $390 ($380 in 2014);
• for those older than age 40 but not older than age 50, the limit is $730 ($710);
• for those older than age 50 but not older than age 60, the limit is $1,460 ($1,430);
• for those older than age 60 but not older than age 70, the limit is $3,900 ($3,800); and
• for those older than age 70, the limit is $4,870 ($4,750).

In addition, for 2016, the per-day limit applicable to aggregate payments for per diem-type long-term care insurance contracts and amounts received by a chronically ill individual under a life insurance contract under Code Sec. 7702B(d)(4) is $340 (from $330 in 2015).

MSAs. For self-only coverage in 2016, a high-deductible health plan (HDHP) is defined in Code Sec. 220(c)(2)(A) as a plan that has an annual deductible that is not less than $2,250 and not more than $3,350 ($2,200 and $3,300 in 2015) and annual out-of-pocket expenses that do not exceed $4,450 (unchanged from 2015). For family coverage in 2016, an HDHP has an annual deductible that is not less than $4,450 and not more than $6,700 (unchanged from $4,350 and up from $6,650 in 2015) and annual out-of-pocket expenses that do not exceed $8,150 (unchanged from 2015).

Transportation. For the taxable year beginning in 2016, the monthly limitation under Code Sec. 132(f)(2)(A), regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass, is $130, unchanged from 2015. The monthly limitation under Code Sec. 132(f)(2)(B), regarding the fringe benefit exclusion amount for qualified parking, is $255, up from $250 in 2015.

SOURCE: Rev. Proc. 2015-53, IRB 2015-44, November 2, 2015.

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