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The IRS Has Released The New Limits For 2021 Pre-Tax Plans

For the first time in many years the FSA and Commuter Benefit limits DID NOT change. Here is what the limits will look like for various plan types in 2021. (Note that the list below only includes plans administered by PS Administrators).

Consumer Directed Plan Limits20212020Change from 2020
Medical FSA Maximum$2,750$2,750No Change
Dependent Care FSA Maximum$5,000$5,000No Change
HSA Max Contribution Limit (Individual)$3,600$3,550$50
HSA Max Contribution Limit (Family)$7,200$7,100+$100
HSA Catch-Up Contribution Limit$1,000$1,000No Change
Mass Transit Monthly Limit$270$270No Change
Parking Monthly Limit$270$270No Change
QSEHRA Reimbursement Limit (Individual)$5,300$5,250+$50
QSEHRA Reimbursement Limit (Family)$10,700$10,600+$100

Helpful Reminders:

  • If you utilize the FSA rollover, the rollover limit is now available at $550 (increase from $500). If you choose to utilize the $550 limit, make sure the service provider in charge of administering your pre-tax plans increases all rollover amounts to $550 going into 2021 from 2020 balances.
  • Thanks to the CARES act, many more over-the-counter medications, as well as menstrual products are now eligible under the Health FSA and do not require a doctor’s note or prescription.
  • Check out our client cheat sheet that breaks down the three most common kinds of pre-tax plans and their functions.

Learn more about how Payroll Systems can seamlessly integrate benefits into its payroll service to help you empower your workforce.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.