2013 Flexible Spending Account Limits

 We are migrating this blog to Facebook and our website. 

 Please visit  www.facebook.com/senneysays and "Like" our page.  

~Or~ 

Send your email address to: jsenney@pselaw.com to receive the latest blog by email.

The Affordable Care Act (sometimes called Obamacare) imposes a new limit on the annual salary reduction contributions that employees may make to a health care flexible spending account.  The new limit is $2,500 per year and starts January 1, 2013.

The limit applies only to the amount the employee contributes.  It does not limit the amount the employer may contribute on behalf of the employee.  The limit applies on per participant basis.  So if husband and wife are both employed, each can contribute $2,500.

Employer's that sponsor cafeteria plans with flexible spending accounts will need to amend their plans to incorporate the new contribution limits.  But this is not the only change imposed by the Affordable Care Act.  More on other aspects of the new law will be included in an upcoming blog.

Please call or email if you have any questions about the Affordable Care Act, the new FSA contribution limits or how to amend your cafeteria plan at Jsenney@pselaw.com or 937-223-1130.

AND ONE MORE THING:   Over the last few years, banks mortgage companies were very aggressive in collecting mortgage loans and foreclosing on residential properties.  When a property is foreclosed on, or a deed is given in lieu of foreclosure, the bank will forgive the unpaid balance of the loan.  The amount forgiven is reported to the IRS on IRS Form 1099-C and is generally treated as taxable income.  However, for debt forgiveness that occurs prior to January 1, 2013, forgiveness of qualified principal residence debt is not taxable.  Call if you want to know more about this qualified principal residence debt exclusion or any other tax matter.  Jsenney@pselaw.com or 937-223-1130.