Tax & Accounting Blog

2014 Brings New Rates, FSA Changes

CS Professional Suite Payroll Solutions December 3, 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:
6.2% $7049.40

FICA:
6.2% $7254.00

 

Medicare:
1.45% $200,000
2.35% > $200,000

Medicare:
1.45% $200,000
2.35% > $200,000

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.