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CCH® BENEFITS — 10/27/08

IRS Issues 2009 Adjusted Limits For Transportation Fringe Benefits, Long Term Care

From Spencer's Benefits Reports: In Rev. Proc. 2008-66, the Internal Revenue Service provides a variety of inflation-adjusted figures for 2009, including figures for qualified transportation fringe benefits, long term care, medical savings accounts (MSAs), and adoption assistance and tax credit limits.

Transportation benefits. For tax years beginning in 2008, the monthly limitation under IRC Sec. 132(f)(2)(A), the fringe benefit exclusion for transportation in a commuter highway vehicle and any transit pass is $120 ($115 in 2008). The monthly limitation under Sec. 132(f)(2)(B), the fringe benefit exclusion amount for qualified parking, rises from $220 to $230.

Long term care. For tax years beginning in 2009, the limitations under IRC Sec. 213(d)(10), eligible long term care premiums deductible as "medical care," are as follows (2008 amounts in parentheses):

• for those age 40 or younger before the close of the taxable year, the premium limitation is $320 ($310);
• for those older than age 40 but not older than age 50, the limit is $600 ($580);
• for those older than age 50 but not older than age 60, the limit is $1,190 ($1,150);
• for those older than age 60 but not older than age 70, the limit is $3,180 ($3,080);
• and for those older than age 70, the limit is $3,980 ($3,850).

In addition, for 2009, 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 IRC Sec. 7702B(d)(4) is $280 (up from $270).

Adoption assistance. For 2009, the maximum aggregate amount per child that an employer can provide an employee for adoption assistance under IRC Sec. 137(a)(2) or that an employee can claim for an adoption tax credit is $12,150 (up from $11,650). The available adoption limit begins to phase out for employees with modified adjusted gross income in excess of $182,180 (up from $174,730), and phases out entirely for employees with modified adjusted gross income of $222,180 (up from $214,730).

Medical savings accounts (MSAs). For self-only coverage in 2009, a high-deductible health plan (HDHP) as defined in IRC Sec. 220(c)(2)(A) as a plan that has an annual deductible that is not less than $2,000 ($1,950 in 2008) and not more than $3,000 (up from $2,900), and annual out-of-pocket expenses that do not exceed $3,850 (up from $4,000). For family coverage in 2009, an HDHP has an annual deductible that is not less than $4,000 (up from $3,850) and not more than $6,050 (up from $5,800), and annual out-of-pocket expenses that do not exceed $7,350 (up from $7,050).

For further information, contact Christina M. Glendening at (202) 622-4920.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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