Publication

02 November 2016

2017 Annual Limits for Employee Benefit Plans Announced

The IRS recently released inflation-adjusted limitations that apply to retirement plans, health savings accounts (HSAs) and medical flexible spending accounts (FSAs) for 2017.

Social Security Taxable Wage Base for 2017

The Social Security Administration recently announced that the maximum amount of earnings subject to Social Security tax is $127,200.

Retirement Plan Dollar Limitations for 2017

The Internal Revenue Service recently announced the dollar limits that apply to retirement plans during 2017. Here are some of the more important limits, none of which changed from last year:

Elective Deferral Limit for 401(k), 403(b) and 457 Plans
2016 Limit: $18,000
2017 Limit: $18,000 (unchanged)

Catch-Up Contribution Limit for 401(k), 403(b) and 457 Plans
2016 Limit: $6,000
2017 Limit: $6,000 (unchanged)

Maximum Compensation Limit for Qualified Retirement Plans
2016 Limit: $265,000
2017 Limit: $270,000

Annual Additions Limit for Defined Contribution Plans
2016 Limit: $53,000
2017 Limit: $54,000

Annual Benefit Limit for Defined Benefit Plans
2016 Limit: $210,000
2017 Limit: $215,000

Annual Compensation for Classification of Highly Compensated Employees
2016 Amount: $120,000
2017 Amount: $120,000 (unchanged)

Note: An employee is a highly compensated employee (HCE) based upon the employee’s compensation during the prior plan year. Therefore, in determining whether an employee is an HCE for a plan year beginning during 2017, the participant’s compensation during the 2016 plan year and the compensation limit for the 2016 plan year are used.

Annual Compensation for Classification of a Key Employee
2016 Limit: $170,000
2017 Limit: $175,000

HSA Dollar Limitations for 2017

The Internal Revenue Service also recently announced increases in the dollar limits that apply to HSAs in 2017:

Annual HSA Contribution Limit
2016 Limit: $3,350 for self-only ($6,750 for family) HDHP coverage
2017 Limit: $3,400 for self-only ($6,750 for family) HDHP coverage

HSA Catch-Up Contribution Limit (for individuals age 55 or older)
2016 Limit: $1,000
2017 Limit: $1,000 (unchanged)

Minimum Annual HDHP Deductible
2016 Limit: $1,300 for self-only ($2,600 for family) HDHP coverage
2017 Limit: $1,300 for self-only ($2,600 for family) HDHP coverage (unchanged)

Maximum HDHP Out-of-Pocket Expense Limit
2016 Limit: $6,550 for self-only ($13,100 for family) HDHP coverage
2017 Limit: $6,550 for self-only ($13,100 for family) HDHP coverage (unchanged)

Medical FSA Limitation for 2017

For taxable years beginning in 2017, the dollar limitation on employee salary reduction contributions to a medical FSA is $2,600. This is a $50 increase from the limit in 2016 ($2,550).

For more information on the above, or if you have any questions, please contact one of the Miller Johnson employee benefits attorneys listed to the right.