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Thursday, October 19, 2017

The Internal Revenue Service today released the 2018 dollar limits for retirement plans, as adjusted under Code Section 415(d). We have summarized the new limits (along with the limits from the last few years) in the chart below.

2018 Qualified Plan Limits

Type of Limitation20182017201620152014
Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1))$18,500$18,000$18,000$18,000$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$6,000$6,000$5,500
SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals$3,000$3,000$3,000$3,000$2,500
415 limit for Defined Benefit Plans$220,000$215,000$210,000$210,000$210,000
415 limit for Defined Contribution Plans$55,000$54,000$53,000$53,000$52,000
Annual Compensation Limit$275,000$270,000$265,000$265,000$260,000
Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993$405,000$400,000$395,000$395,000$385,000
Highly Compensated Employee 414(q)(1)(B)$120,000$120,000$120,000$120,000$115,000
Key employee in top heavy plan (officer)$175,000$175,000$170,000$170,000$170,000
SIMPLE Salary Deferral$12,500$12,500$12,500$12,500$12,000
Tax Credit ESOP Maximum balance$1,105,000$1,080,000$1,070,000$1,070,000$1,050,000
Amount for Lengthening of 5-Year ESOP Period$220,000$215,000$210,000$210,000$210,000
Taxable Wage Base$128,700$127,200$118,500$118,500$117,000
IRAs for individuals 49 and below$5,500$5,500$5,500$5,500$5,500
IRAs for individuals 50 and above$6,500$6,500$6,500$6,500$6,500
FICA Tax for employees and employers7.65%7.65%7.65%7.65%7.65%
Social Security Tax for employees and employers6.2%6.2%6.2%6.2%6.2%
Medicare Tax for employers and employees1.45%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
.9% of comp
>$200,000
.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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