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IRS Indexed Figures for 2010

Tax Benefit	2009 (old)	2010 (New)
Adoption Credit
This credit starts to phase out a $182,520 of modified adjusted gross income (AGI) levels, and is completely phased out when modified AGI reaches $222,520.	$12,150	$12,170
Adoption Credit through Section 125 Cafeteria Plan A participant may take the exclusion from income and the tax credit if enough expenses are incurred to support both platforms.	$12,150	$12,170
Commuter Accounts
Parking - Monthly Limit	$230	$230
Transit Passes and Vanpooling (combined) - Monthly Limits	$120/$230*	$230
Health Savings Account (HSA) Minimum deductible amounts for the qualifying high-deductable health plan (HDHP)
Individual Coverage	$1,150	$1,200
Family Coverage	$2,300	$2,400
Maximum Contribution Levels**
Individual Coverage	$3,000	$3,050
Family Coverage	$5,950	$6,150
Catch Up Contribution Allowed for Those 55 and Over	$1,000	$1,000
Maximums For HDHP Out-of-Pocket Expenses
Individual Coverage	$5,800	$5,950
Family Coverage	$11,600	$11,900
Long-Term Care
For A Qualified Long-Term Care Insurance Policy. The Maximum Non-Taxable Per-Diem	$280 Per Day	$290 Per Day

*$120 per month for Jan.-Feb. 2009; $230 per month for Mar.-Dec. 2009. The American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5 (Feb. 17, 2009) amended Code § 132(f)(2) to make the monthly limit for transit passes and vanpooling temporarily the same as the monthly limit for parking. This change is effective only through December 2010.

**An employee is treated as being eligible for the entire calendar year as long as he or she is eligible during the last month of the calendar year. However, failure to maintain eligibility during the “testing period” will result in adverse tax consequences (including an additional 10% excise tax). The testing period begins in December of the year in which the employee becomes eligible and ends the last day of December of the following year.

Dependent and/or Child Daycare Expenses

Just a reminder. Although the daycare expense limit associated with a cafeteria plan is not indexed, the credit available through a participant’s tax filing was raised in 2003. The daycare expenses credit must be filed on Form 2441, which should be attached to the 1040 tax filing form.

The cafeteria plan daycare contribution limit remains at $5,000 for a married couple filing a joint return, or for a single parent filing as “Head of Household.” For a married couple filing separate returns, the limit is $2,500 each.

The limits for the daycare expenses credit are $3,000 of expenses covering one child and $6,000 for families with two or more children. If one of the parents is going to school full time or is incapable of self-care, the non-working spouse would be “deemed” as earning $250 per month for one qualifying child and $500 for two or more qualifying children. This “deemed” earned income is to be used whether a person is using the employer’s cafeteria plan or taking the daycare credit.

The daycare credit is reduced, dollar for dollar, by contributions to or benefits received from an employer’s cafeteria plan. A participant may participate in their employer’s cafeteria plan and also take a portion of the daycare expenses through the credit if they have sufficient expenses in excess of their cafeteria plan annual election, but within the tax credit limits.