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10.27.2016 Benefit and Contribution Limits for 2017 By: Marc Purintun; Elinor H. Clendenin ; Brydon M. DeWitt; Robert B. Hamlett, Jr. & Nona K. Massengill

The Commissioner of Internal Revenue announced the 2017 dollar limitations for benefits and contributions that apply to retirement and cafeteria plans. Some limits have increased while others remained the same. The Social Security Administration increased the Social Security taxable wage base.  Increases for health savings accounts were announced this summer.  The following chart shows the 2017 limits and the similar limits for 2016.

Benefit Limits Under the Internal Revenue Code and Social Security

Description

2016 Limit

2017 Limit

Compensation Cap (401(a)(17))

$265,000

$270,000

Elective Deferral Limitation under 402(g)(1) for elective deferrals for 401(k) plans, SEPs and 403(b) plans

$18,000

$18,000

Catch-Up Contributions for Individuals Age 50 and Older

For SIMPLE IRAs or SIMPLE 401(k) plans

$6,000

$3,000

$6,000

$3,000

Defined Benefit Maximum Annual Accrual

$210,000

$215,000

Defined Contribution Maximum Annual Addition

$53,000

$54,000

Highly Compensated Employee Compensation Threshold

Key Employee in Top-Heavy Plans Compensation Threshold

$120,000

$170,000

$120,000

$175,000

ESOP threshold for determining maximum account balance subject to 5-year distribution period

Regular Limit
Additional amount to lengthen 5-year period

 


$1,070,000
$210,000

 


$1,080,000
$215,000

SEP Compensation Threshold for Participation

$600

$600

SIMPLE IRA Maximum Pre-Tax Contribution

$12,500

$12,500

Deferral Limit for 457(b) Plans of Governmental
and Tax-Exempt Entities

$18,000

$18,000

IRA Maximum Deduction

$5,500

$5,500

Social Security Taxable Wage Base

$118,500

$127,200

Health Savings Account Maximum Contributions

Family Coverage
Single Coverage

 

$6,750
$3,350

 

$6,750
$3,400

Health Flexible Spending Account Annual Limit

$2,550

$2,600