Cafeteria plan FSA contributions will be limited to $2,500 (inflation adjusted after 2013.)
Medicare Payroll Tax*
• The Medicare payroll tax on wages and self-employment income in excess of $200,000 ($250,000 joint) will increase by 0.9%, and also applies for the first time, to net investment income.
• Earners in excess of $200,000 ($250,000 joint) will pay an additional 3.8% Medicare tax on investment income. The income thresholds are not indexed to inflation.
Fewer Deductible Medical Expenses*
New limits are placed on the deductibility of medical expenses on individual income tax returns.
Elimination of Deductible*
The existing employer tax deduction for the Part D subsidy is eliminated.
Employers will be required to report the value of employees’ health benefits on W-2s. To provide transitional relief, the IRS is not currently requiring employers with fewer than 250 employees to comply with this requirement.