In Revenue Procedure 2006-53, the 2007 HSA contribution limits and high-deductible health plan (HDHP) requirements (under Code Section 223) will be $2,850 for self-only HDHP coverage (a $150 increase from 2006) and $5,650 for family HDHP coverage (a $200 increase from 2006).
The HSA catch-up contribution limit (for individuals who are 55 or older) will be $800 in 2007, a $100 increase from 2006. The required minimum annual HDHP deductible will be $1,100 for self-only HDHP coverage (a $50 increase from 2006) and $2,200 for family HDHP coverage (a $100 increase from this year’s level).
Maximum HDHP out-of-pocket expense limits will be $5,500 for self-only coverage (a $250 increase from 2006) and $11,000 for family coverage (a $500 increase).
Additionally, the so-called Saver’s Tax Credit, which applies to certain low-income individuals who contribute to a 401(k) plan, (or certain other qualified retirement plans or IRAs) – given a new lease on life by the removal of EGTRRA’s sunset provision in the Pension Protection Act of 2006 (see What’s Inside the Pension Protection Act ), will next year be applied to higher income levels.
In 2007, the tax credit applies to individuals with adjusted gross income not exceeding:
- $52,000 (for those married filing jointly, a $2,000 increase from the 2006 level),
- $39,000 (for head of household, a $1,500 increase), or
- $26,000 (for all others, such as single or married filing separately, which will be a $1,000 increase).
In addition to the removal of the EGTRRA sunset provisions, these amounts first became subject to annual cost-of-living adjustments next year as a result of the Pension Protection Act of 2006.
Additionally, the IRS updated the limits relevant to Dependent Care Assistance Programs (DCAPs), as well as the Adoption Assistance Program/Adoption Credit ($11,390 for 2007, a $430 increase from this year’s). The exclusion will begin to be phased out for individuals with modified adjusted gross income greater than $170,820 and will be phased out entirely for individuals with modified adjusted gross income of $210,820 or more.
For 2007, the Revenue Procedure also says that the monthly limit on the amount that may be excluded from an employee’s income will be $215 for qualified parking benefits, and $110 for transit and vanpooling expenses combined, a $10 and $5 increase from the 2006 limits, respectively.
The Revenue Procedure is online at http://www.irs.ustreas.gov/pub/irs-drop/rp-06-53.pdf