iThe IRS has released adjusted dollar limits for employer-sponsored retirement and welfare plans, as well as for individual retirement vehicles effective as of January 1, 2018. Most of these limits have been increased for the coming calendar year.
In addition, the Social Security Administration increased the taxable earnings wage base from $127,200 in 2017 to $128,700 for 2018.
Plan sponsors should update their payroll and plan administration systems to take into account the new limits. In addition, sponsors of safe harbor 401(k) plans can now prepare and send their 2018 annual safe harbor notices showing the contribution limits for the coming year.
Retirement Plan Limits
|
|
|
|
| Pre-tax deferrals under 401(k), 403(b) and 457(b) plans (402(g) limit) | $18,000 | $18,500 |
| Pre-tax deferrals under SIMPLE 401(k) plans | $12,500 | $12,500 |
| Catch-up contributions for participants age 50 or older | $6,000 | $6,000 |
| Defined contribution plan annual contribution limit | $54,000 | $55,000 |
| Defined benefit plan annual benefit/accrual limit | $215,000 | $220,000 |
| Annual compensation limit | $270,000 | $275,000 |
| Highly compensated employee definition | $120,000 | $120,000 |
| Key employee definition for top-heavy plans | $175,000 | $175,000 |
| Limit for lengthening the ESOP distribution period | $215,000 | $220,000 |
| Maximum ESOP account balance subject to a five-year distribution period | $1,080,000 | $1,105,000 |
Health & Welfare Plan Limits
|
|
|
|
| High-Deductible Health Plan (HDHP) minimum annual deductible: | ||
| Single coverage | $1,300 | $1,350 |
| Family coverage | $2,600 | $2,700 |
| HDHP maximum out-of-pocket limit: | ||
| Single coverage | $6,550 | $6,650 |
| Family coverage | $13,100 | $13,300 |
| HSA annual contribution limit: | ||
| Single coverage | $3,400 | $3,450 |
| Family coverage | $6,750 | $6,900 |
| Catch-up contributions (age 55 and older) | $1,000 | $1,000 |
| Qualified Small Employer Health Reimbursement Account Reimbursement Limit: | ||
| Single coverage | $4,950 | $5,050 |
| Family coverage | $10,000 | $10,250 |
| Flexible Spending Account (FSA) contribution limit: | ||
| Health FSA | $2,600 | $2,650 |
| Dependent Care FSA (single or filing jointly) | $5,000 | $5,000 |
| Transportation Spending Account | ||
| Monthly contributions for parking or mass transit | $255 | $260 |
