IRS issues inflation-adjusted 2018 amounts for adoption assistance programs, MSAs and HSAs

Tax Hot Topics newsletter The IRS issued Rev. Proc. 2018-18 to adjust various amounts for 2018 to reflect changes from the tax reform legislation enacted at the end of 2017, including inflation adjustments to adoption assistance programs, medical savings accounts (MSAs) and health savings accounts (HSAs). Employers may need to adjust their internal payroll and benefits programs to reflect these changes.

Beginning in 2018, the maximum excludible amount for qualified adoption expenses for a special needs child or other adoptions is $13,810 per child. The amount excludable from an employee’s gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $207,140 and is completely phased out for taxpayers with modified adjusted gross income of $247,140 or more.

Deductible and contribution amounts for MSAs and HSAs have been adjusted for 2018 as follows:
Chart: MSA THT
Chart: HSA  THT

Contact Eddie Adkins
Partner, Washington National Tax Office
T +1 202 521 1565

Jeffrey Martin
Partner, Washington National Tax Office
T +1 202 521 1515

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