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Tuesday, October 27, 2015

They’re here—the 2016 IRS plan limitations-but they’re not new. Because the change in the cost-of-living index doesn’t trigger an adjustment, the qualified plan limits identified here do not change in 2016. See the chart below to see the 2016 limits as well as a summary of the limits over the preceding three years. Note that certain other limitations do change for 2016 (e.g. certain IRA limits), but not the qualified plan limits reported here.

Type of Limitation 2016 2015 2014 2013
Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $18,000 $18,000 $17,500 $17,500
Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) $6,000 $6,000 $5,500 $5,500
SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $2,500 $2,500
415 limit for Defined Benefit Plans $210,000 $210,000 $210,000 $205,000
415 limit for Defined Contribution Plans $53,000 $53,000 $52,000 $51,000
Annual Compensation Limit $265,000 $265,000 $260,000 $255,000
Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 $395,000 $395,000 $385,000 $380,000
Highly Compensated Employee 414(q)(1)(B) $120,000 $120,000 $115,000 $115,000
Key employee in top heavy plan (officer) $170,000 $170,000 $170,000 $165,000
SIMPLE Salary Deferral $12,500 $12,500 $12,000 $12,000
Tax Credit ESOP Maximum balance $1,070,000 $1,070,000 $1,050,000 $1,035,000
Amount for Lengthening of 5-Year ESOP Period $210,000 $210,000 $210,000 $205,000
Taxable Wage Base $118,500 $118,500 $117,000 $113,700
FICA Tax for employees and employers 7.65% 7.65% 7.65% 7.65%
Social Security Tax for employees 6.2% 6.2% 6.2% 6.2%
Social Security Tax for employers 6.2% 6.2% 6.2% 6.2%
Medicare Tax for employers and employees 1.45% 1.45% 1.45% 1.45%
Additional Medicare Tax* .9% of comp
>$200,000
.9% of comp > $200,000 .9% of comp > $200,000 0.9% of comp > $200,000

*For taxable years beginning after 12/31/12, an employer must withhold Additional Medicare Tax on wages or compensation paid to an employee in excess of $200,000 in a calendar year for single/head of household filing status ($250,000 for married filing jointly).

 

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