ARTICLE

IRS Releases Updated Cost of Living Adjustments for the 2017 Plan Year

by: Smith and Howard

December 22, 2016

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On October 27, 2016, the Internal Revenue Service (“IRS”) announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2017 tax year. The table below summarizes the updated IRS limits on benefits and compensation, the updated limits on certain welfare plans, and the updated taxable wage base for the FICA Social Security tax. The IRS issued technical guidance detailing these items in Notice 2016-62, Rev. Proc. 2016-55 and Rev. Proc. 2016-28. 

Retirement Plan Updated Limits

 

 

 

 

 

2017

2016

2015

2014

2013

Maximum Elective Deferral 402(g)(1) for 401(k)/403b/457 Plans

$18,000

$18,000

$18,000

$17,500

$17,500

Catch-up Contributions 414(v)(2)(B)(i) for 401(k)/403b/457 Plans

$6,000

$6,000

$6,000

$5,500

$5,500

Defined Contribution Plan

$54,000

$53,000

$53,000

$52,000

$51,000

Annual Additions Limit 415(c)(1)(A)

Defined Benefit Plan

$215,000

$210,000

$210,000

$210,000

$205,000

Annual Benefit Limit 415(b)(1)(A)

Qualified Plan

$270,000

$265,000

$265,000

$260,000

$255,000

Compensation Limit 401(a)(17)/404(l)

Highly Compensated Employees Compensation Test 414(q)(1)(B)

$120,000

$120,000

$120,000

$115,000

$115,000

Top Heavy Key EE Definition

$175,000

$170,000

$170,000

$170,000

$165,000

Officer Test 416(i)(1)(A)(i)

SIMPLE Plan

$12,500

$12,500

$12,500

$12,000

$12,000

Maximum Contributions 408(p)(2)(E)

SIMPLE Plan Catch-up Contributions 414(v)(2)(B)(ii)

$3,000

$3,000

$3,000

$2,500

$2,500

SEP Maximum Contribution 408(j)

$54,000

$53,000

$53,000

$52,000

$51,000

SEP Minimum Compensation 408(k)(2)(C)

$600

$600

$600

$550

$550

SEP Maximum Compensation 408(k)(3)(C)

$270,000

$265,000

$265,000

$260,000

$255,000

IRA Contribution Limit 219(b)(5)(A)

$5,500

$5,500

$5,500

$5,500

$5,500

IRA Catch-up Contributions 219(b)(5)(B)

$1,000

$1,000

$1,000

$1,000

$1,000

ESOP Limits 409(o)(1)(C)(ii) Five Year Distribution Threshold

$1,080,000

$1,070,000

$1,070,000

$1,050,000

$1,035,000

ESOP Limits 409(o)(1)(C)(ii) Additional Year Threshold

$215,000

$210,000

$210,000

$210,000

$205,000

Control Employee (board member or officer) 1.61-21(f)(5)(i)

$105,000

$105,000

$105,000

$105,000

$100,000

Control Employee (compensation-based) 1.61-21(f)(5)(iii)

$215,000

$215,000

$215,000

$210,000

$205,000

 

 

 

 

 

 

Welfare Plan Updated Limits

 

 

 

 

 

 

2017

2016

2015

2014

2013

Flexible Spending Arrangement 125(i)

$2,600

$2,550

$2,550

$2,500

$2,500

Health Savings Account 223(b)(2)(A)

$3,400

$3,350

$3,350

$3,300

$3,250

Adoption Assistance Credit 137(a)(2)

$13,570

$13,400

$13,400

$13,190

$12,970

 

 

 

 

 

 

FICA Social Security Tax Updated Limit

 

 

 

 

 

 

2017

2016

2015

2014

2013

Social Security Taxable Wage Base

$127,200

$118,500

$118,500

$117,000

$113,700

Social Security Insurance Rates

6.20%

6.20%

$0

6.20%

6.20%

Medicare Insurance Rates

1.45%

1.45%

1.45%

1.45%

1.45%

Additional Medicare Insurance Tax Rates for wages, compensation or self-employment income in excess of $250,000/$125,000/ $200,000 depending on filing status

0.90%

0.90%

0.90%

0.90%

0.90%

 

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