IRS Announces 2023 COLAs for Transportation Fringes, FSA Deferrals
The IRS released cost-of-living-adjustments (COLAs) for 2023 reflecting any increases in excludable transportation fringes and the flexible spending arrangement (FSA) deferral limit, among other changes [Rev. Proc. 2022-38, 10-18-22].
For 2023, the amounts that may be excluded from gross income for employer-provided qualified transportation fringe benefits and qualified parking increase to $300 per month ($280 in 2022).
For plan years beginning in 2023, the dollar limitation for voluntary employee salary reductions for contributions to health FSAs increases to $3,050 ($2,850 in 2022). For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount increases to $610 ($570 in 2022).
For More Information
Complete coverage of the announced changes will be in the November issue of Payroll Currently.
Also, see the APA Compliance Update, IRS Announces 2023 COLAs for Transportation Fringes, FSA Deferrals, Foreign Earned Income Inclusion, and More. Compliance updates are emailed to APA members and are also available on the Compliance Updates webpage.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!
Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Senior Manager of Payroll Information Resources for the APA.