How to inflation-adjust amounts not designed in Tom Poje’s spreadsheet

For years, John Feldt has generously given us inflation updates using Tom Poje’s spreadsheet.

But that spreadsheet might not do everything we now use. That’s for at least a few reasons:

The spreadsheet likely was designed for to-be-adjusted items then known, not for laws Congress enacted later.

Not all adjustments, even those for points a retirement-plans practitioner cares about, fall in with § 415(d)’s regime; many refer to an adjustment regime under Internal Revenue Code § 1 or something else.

Even beyond those points, the spreadsheet might have been designed based on expected users’ business interests.

Some BenefitsLink neighbors already have asked about adjustments not in the spreadsheet.

Let’s crowdsource some recent measures. I’ll start:

(Organized by Internal Revenue Code section; original amount; rounding increment, and rounding down or nearest; and text of the adjustment provision, with highlighting on the base-period year.)

I.R.C. § 45E(f)(2)(C)(iii)(II) [Small employer pension plan startup costs]; $100,000; $5,000, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.”

But in November 2024 the IRS stated: “Pursuant to section 45E(f)(2)(C)(iii), for a taxable year beginning in a calendar year after 2023, this limitation is equal to the initial limitation of $100,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in section 1(f)(3)(A)(ii). Because the specification of a 2007 base period to be used for computing an adjustment that is first made for 2024 appears to be an error that has been identified as the subject of future legislative correction, the IRS will calculate and apply the limitation in section 45E(f)(2)(C) by substituting ‘calendar year 2022’ for ‘calendar year 2007’ in section 45E(f)(2)(C)(iii). Using that substitution, the limitation for 2024 was [and for 2025 is] $105,000. IRS Notice 2024-80, 2024–47 I.R.B. 1120 (Nov. 18, 2024), https://www.irs.gov/pub/irs-irbs/irb24-47.pdf (emphasis added).

(Some practitioners, especially those proposing services for a startup plan, want to know this adjustment now because it affects an employer’s tax credit, which might affect whether the employer sees service providers’ fees as affordable.) I guess the amount remains $105,000 for 2026.

I.R.C. § 72(t)(2)(K)(vii)(I) [eligible distribution to a domestic abuse victim]; $10,000; $100, rounded nearest; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” {So, $10,500 or $10,600?}

I.R.C. § 219(b)(5)(C)(i)(II) [IRA contribution]; $5,000; $500, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.”

I.R.C. § 219(b)(5)(C)(iii)(II) [age 50 extension for IRA]; $1,000; $100, rounded down; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2022’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.”

401(a)(39)(B)(ii)(II) [qualified long-term care distribution]; $2,500; $100, rounded nearest; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.”

I.R.C. § 408(d)(8)(G)(i)(II) [qualified charitable distribution]; $100,000 / $50,000; $1,000, rounded nearest; “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2022’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.”

I.R.C. § 457(e)(11)(B)(ii) [length-of-service award]; $6,000; $500, rounded down; “In the case of taxable years beginning after December 31, 2017, the Secretary shall adjust the $6,000 amount under clause (ii) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2016, and any increase under this paragraph that is not a multiple of $500 shall be rounded to the next lowest multiple of $500.”

Instead of § 415(d)’s July-August-September measures, Internal Revenue Code § 1(f)(4) provides: “For purposes of [I.R.C. § 1(f)](3), the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on August 31 of such calendar year.”

On October 9, the Internal Revenue Service released 2025 amended amounts (following the July 4, 2025 budget-reconciliation Act) and tax-year 2026 inflation adjustments for 63 tax provisions. Rev. Proc. 2025-32 (not yet published in the Internal Revenue Bulletin), available at https://www.irs.gov/pub/irs-drop/rp-25-32.pdf.

Among others, 2026’s § 125(i) limit on salary reductions to a health flexible spending arrangement is $3,400, with a $680 maximum carryover.

In the Bureau of Labor Statistics website, a search on [“Consumer Price Index” AND August] calls up many earlier years September releases of August-close measures. https://data.bls.gov/search/query/results?q=%22Consumer%20Price%20Index%22%20AND%20August

BenefitsLink neighbors, with a little work we can figure any not-yet-released inflation adjustment.

Inflation.docx

of course, there is nothing to stop someone from adding additional items to the spreadsheet.

the spreadsheet originated in the is way:

years ago, when Benefits Link first started, Dave Baker had a spot you could 'articles' or something similar. too long ago for me to remember. I had been curious how the numbers for limits were calculated, the IRS would release them , and by coincidence always at the time of the ASPA Annual Conference. So I researched the issue and wrote an article about how the values were derived. Someone did contact me and said everything was fine, but I didn't indicate the calculation were done to 3 decimal places.

Then someone else sent me a spreadsheet he created based on what I wrote up and asked me to see if it made sense. (I think it was Ken Vollmer) Spreadsheet worked great,  I modified the spreadsheet to my tastes, and then the following year verified the numbers matched the IRS calculations. After that I would plug in the CPI values and post the 'projected' calculations on Benefits Link, probably as early as June. And then eventually posted the spreadsheet so others could use it. 

Certainly the spreadsheet was a better contribution than my postings in the humor column or any pension songs I attempted, I'm sure.

God bless all, enjoying retirement, helping out at church in many different ways. Taught myself to play the psaltery. peeking in at the web site from time to time.