Benefits
IRS to Allow Rollovers for Flex Spending Accounts in 2014
The IRS surprised employers a few weeks back with a rule change that allows flexible spending account participants to roll over up to $500 of their unused account balances into the next year.
Dec. 24, 2013
A pleasant surprise is in store for flexible spending account participants in 2014.
The IRS surprised employers a few weeks back with a rule change that allows flexible spending account participants to roll over up to $500 of their unused account balances into the next year. The change even allows the rollover of 2013 balances, meaning that flexible spending accounts are no longer a strictly use-it-or-lose-it proposition. Companies that provide HSAs for their employees will need to change their plan descriptions in order to take advantage of the new carryover rules.
Other rate changes are more pedestrian; mostly incremental increases in limits. Here's a rundown of the changes in the most commonly used rates and limits.
2014 Rates
| 2013 | 2014 | |
| Social Security | $113,700 | $117,000 |
|
FICA: |
FICA: |
|
|
Medicare: |
Medicare: |
|
| Domestic worker threshold | $1,800 | $1,900 |
| Elections workers | $1,600 | $1,600 |
| Transit passes, van pool, bike | $245/$245/new | $130/$130/$20 |
| Parking | $245 | $250 |
| 415(b)(1)(A) defined benefit max | $205,000 | $210,000 |
| Max contribution | $51,000 | $52,000 |
| Education assistance | $5,250 | $5,250 |
| Limitations | ||
| – 401(k) | $17,500 | $17,500 |
| – 403(b) | $17,500 | $17,500 |
| – 408(p) | $12,000 | $12,000 |
| 414(v) catch-up | $5,500 | $5,500 |
| 414(v) catch-up simple | $2,500 | $2,500 |
| IRA | $5,500-6,500 > 50 | $5,500-6,500 > 50 |
| Limitations | ||
| – Highly Compensated 414 | $115,000 | $115,000 |
| Annual compensation limits | ||
| – 401 gvt plans in effect 7/1/93 | $380,000 | $385,000 |
| HSA | ||
| Annual deduction limit single/family | $1,250/$2,500 | $1,250/$2,500 |
| Maximum out-of-pocket single/family | $6,250/$12,500 | $6,350/$12,700 |
| Maximum annual contribution single/family | $3,250/$6,450 | $3,300/$6,550 |
| Maximum annual catch-up (55) | $1,000 | $1,000 |
| Foreign Income Exclusion | $97,600 | $99,200 |
| Minimum annual comp 408 | $550 | $550 |
| Adoption Exclusion limits | $12,970 | $13,190 |
| – Phase out AGI | $194,580 | $197,880 |
| – Total exclusion AGI | $234,580 | $237,880 |
| Definition of Control Employee | $100,000 | $105,000 |
| – Corp officer | $100,000 | $105,000 |
| – Earnings test | $205,000 | $210,000 |
| Definition of Highly Comp. Key Employee Top Heave Plan |
$115,000 $165,000 |
$115,000 $170,000 |
| Long-term premiums | ||
| – < 40 | $350 | $370 |
| – 40-50 – 50-60 |
$680 $1,360 |
$700 $1,400 |
| – 60-70 | $3,640 | $3,720 |
| – > 70 | $4,550 | $4,660 |
Foreign Income Exclusions
| Maximum Foreign Earned | Income Exclusion | Housing Limit | Base Housing | Max Foreign Cost Exclusion |
| 2012 | $95,100 | $28,530 | $15,216 | $13,314 |
| 2013 | $97,600 | $29,280 | $15,616 | $13,664 |
| 2014 | $99,200 | $29,760 | $15,872 | $13,888 |
State Unemployment Insurance wage base changes. Only states with changes for 2014 are shown.
| State | 2013 | 2014 |
| Alaska | $36,900 | $38,000 |
| Colorado | $11,300 | $11,700 |
| Delaware | $10,500 | $18,500 |
| Hawaii | $39,600 | $40,400 |
| Idaho | $34,800 | $35,500 |
| Illinois | $12,900 | $12,960 |
| Kentucky | $9,300 | $9,600 |
| Montana | $27,900 | $29,000 |
| Nevada | $26,900 | $27,400 |
| New York | $8,500 | $10,300 |
| New Jersey | $30,900 | $38,000 |
| Oklahoma | $20,100 | $31,500 |
| Pennsylvania | $8,500 | $8,750 |
| Rhode Island | $20,200/$21,700 | $20,600/$22,100 |
| South Dakota | $13,000 | $14,000 |
| Utah | $30,300 | $31,100 |
| Washington | $39,800 | $41,300 |
| Wyoming | $23,800 | $24,600 |
State minimum wage changes. Only states with changes for 2014 are shown. All are effective 1/1/2014 except as noted.
| State | 2013 | 2014 |
| California | $8.00 | $9.00 (effective 7/1/2014) |
| Colorado | $7.78 | $8.00 (proposed) |
| Connecticut | $8.25 | $8.70 |
| Florida | $7.79 | $7.93 |
| Montana | $7.80 | $7.90 |
| New Jersey | $7.25 | $8.25 |
| New York | $7.25 | $8.00 |
| Ohio | $7.85 | $7.95 |
| Oregon | $8.95 | $9.10 |
| Rhode Island | $7.75 | $8.00 |
| Vermont | $8.60 | $8.73 |
| Washington | $9.19 | $9.32 |
| SeaTac | $15.00 (tentative) |
All numbers are current as of Nov 18, 2013 and subject to additions and changes.
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James Paille, CPP, is the Director of Operations for Thomson Reuters' myPay Solutions. He has been an executive manager in the payroll service industry for over 30 years, specializing in managing multi-location offices. He is a member of the APA's Board of Directors and National Speakers Bureau, and chairs the CPP Certification Review Panel. He holds a BS in Accounting from St. John Fisher College in Rochester, NY.