IRS releases fringe benefit inflation adjustments for 2018

19 October 2017

In Revenue Procedure 2017-58, the IRS announced the inflation adjustments that will apply to various fringe benefits in 2018.

Medical Savings Account (MSA) limits go up in 2018

Summarized below are the 2018 limits that apply to MSAs under Section 220(c)(2)(A).

Provision	Self-only coverage	Family coverage
High deductible health plan: annual deductible	Not less than $2,300 (up from $2,250 in 2017) and not more than $3,450 (up from $3,350 in 2017)	Not less than $4,600 (up from $4,500 in 2017) and not more than $6,850 (up from $6,750 in 2017)
Annual out-of-pocket (other than for premiums)	Not to exceed $4,600 (up from $4,500 in 2017)	Not to exceed $8,400 (up from $8,250 in 2017)

Adoption assistance limit goes up

The limit on qualified adoption assistance (including special needs children) under Section 23(a)(3) for 2018 is $13,840, up from $13,570 in 2017.

Health flexible spending account (FSA) limit goes up

The 2018 annual limit on the amount of pretax contributions employees can make toward their health flexible spending account through a cafeteria plan under Section 125(i) is $2,650, up from $2,600 in 2017.

Transportation fringe benefits (parking and transit) unchanged

The 2018 monthly limit on parking benefits under Section 132(f)(2)(B) is $260, up from $255 in 2017.

The 2018 aggregate monthly limit for transportation in a commuter highway vehicle and any transit pass under Section 132(f)(2)(A) is also $260, an increase from $255 in 2017.

For the key federal and state rates and limits in 2017 see our special report here.

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Contact Information
For additional information concerning this Alert, please contact:

Workforce Advisory Services — Employment Tax Advisory
• Debera Salam	(713) 750-1591
• Kristie Lowery	(704) 331-1884
• Kenneth Hausser	(732) 516-4558
• Debbie Spyker	(720) 931-4321

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ATTACHMENT

EY Payroll News Flash

Document ID: 2017-1740