IRS Issues 2017 Benefits and Contributions Limits
Published:The Internal Revenue Service recently announced the cost-of-living adjustments (COLA) for tax year 2017, that apply to dollar limits for 401(k) and other retirement plans. The announcement highlighted the following:
- 401(k), 403(b) and profit-sharing plan elective deferrals will remain the same at $18,000. The catch-up contribution amount remains unchanged as well ($6,000) for those that turn 50 during the year or are older.
- The annual defined contribution limit from all sources will increase to the lessor of $54,000 (plus the catch-up) or 100% of the employee’s compensation.
- The amount of employee compensation that can be considered in calculating contributions to defined contribution plans will increase to $270,000.
- The Social Security Taxable Wage Base will increase to $127,200.
For 2017, following are the annual limits that affect the various retirement plans:
| 2017 | 2016 | 2015 | |
| 401(k), 403(b), Profit-Sharing Plans, etc. | |||
| Annual Compensation | 270,000 | 265,000 | 265,000 |
| Elective Deferrals | 18,000 | 18,000 | 18,000 |
| Catch-up Contributions | 6,000 | 6,000 | 6,000 |
| Defined Contribution Limits | 54,000 | 53,000 | 53,000 |
| ESOP Limits | 1,080,000 215,000 |
1,070,000 210,000 |
1,070,000 210,000 |
| IRAs | |||
| IRA Contribution Limit | $5,500 | $5,500 | $5,500 |
| IRA Catch-Up Contributions | 1,000 | 1,000 | 1,000 |
| SEP | |||
| SEP Minimum Compensation | 600 | 600 | 600 |
| SEP Maximum Contribution | 54,000 | 53,000 | 53,000 |
| SEP Maximum Compensation | 270,000 | 265,000 | 265,000 |
| SIMPLE Plans | |||
| SIMPLE Maximum Contributions | 12,500 | 12,500 | 12,500 |
| Catch-up Contributions | 3,000 | 3,000 | 3,000 |
| Other | |||
| HCE Threshold | 120,000 | 120,000 | 120,000 |
| Key Employee | 175,000 | 170,000 | 170,000 |
| 457 Elective Deferrals | 18,000 | 18,000 | 18,000 |
| Defined Benefit Limits | 215,000 | 210,000 | 210,000 |
| Taxable Wage Base | 127,200 | 118,500 | 118,500 |
If you would like additional information or to discuss the topics mentioned, please contact Marie Jett, CPA at 317-260-4472 or mjett@greenwaltcpas.com.