Publication

26 October 2017

2018 Annual Limits for Retirement Plans, HSAs and Medical FSAs Announced

The IRS recently released inflation-adjusted limitations that apply to retirement plans, health savings accounts (“HSAs”) and medical flexible spending accounts (“FSAs”) for 2018.

Social Security Taxable Wage Base for 2018

The Social Security Administration recently announced that the maximum amount of earnings subject to Social Security tax will remain the same at $128,700.

Retirement Plan Dollar Limitations for 2018

The Internal Revenue Service recently announced the dollar limits that apply to retirement plans during 2018.  Here are some of the more important limits:

Elective Deferral Limit for 401(k), 403(b) and 457 Plans

2017 Limit:  $18,000
2018 Limit:  $18,500

Catch-Up Contribution Limit for 401(k), 403(b) and 457 Plans

2017 Limit:  $6,000
2018 Limit:  $6,000 (unchanged)

Maximum Compensation Limit for Qualified Retirement Plans

2017 Limit:  $270,000
2018 Limit:  $275,000

Annual Additions Limit for Defined Contribution Plans

2017 Limit:  $54,000
2018 Limit:  $55,000

Annual Benefit Limit for Defined Benefit Plans

2017 Limit:  $215,000
2018 Limit:  $220,000

Annual Compensation for Classification of Highly Compensated Employees

2017 Amount:  $120,000
2018 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 2018, the participant’s compensation during the 2017 plan year and the compensation limit for the 2017 plan year are used.

Annual Compensation for Classification of a Key Employee

2017 Limit:  $175,000
2018 Limit:  $175,000 (unchanged)

HSA Dollar Limitations for 2018

The Internal Revenue Service also recently announced increases in the dollar limits that apply to HSAs in 2018:

Annual HSA Contribution Limit

2017 Limit:  $3,400 for self-only ($6,750 for family) HDHP coverage
2018 Limit:  $3,450 for self-only ($6,900 for family) HDHP coverage

HSA Catch-Up Contribution Limit (for individuals age 55 or older)

2017 Limit:  $1,000
2018 Limit:  $1,000 (unchanged)

Minimum Annual HDHP Deductible

2017 Limit:  $1,300 for self-only ($2,600 for family) HDHP coverage
2018 Limit:  $1,350 for self-only ($2,700 for family) HDHP coverage

Maximum HDHP Out-of-Pocket Expense Limit

2017 Limit:  $6,550 for self-only ($13,100 for family) HDHP coverage
2018 Limit:  $6,650 for self-only ($13,300 for family) HDHP coverage

Medical FSA Limitation for 2018

For taxable years beginning in 2018, the dollar limitation on employee salary reduction contributions to a medical FSA is $2,650.  This is a $50 increase from the limit in 2016 ($2,600).

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