back

AP Compliance Alert: IRS' Announces 2018 Contribution Limits

The IRS has announced the 2018 cost-of-living adjustments (COLAs) with respect to retirement plan limits. Many limits, which are adjusted by reference to Code Sec. 415(d), are changed for 2018 since the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, others remain unchanged. Certain dollar limit changes keyed to Code Sec. 1(f)(3), some of which were previously calculated by Thomson Reuters Checkpoint editors, have also increased. IR 2017-177; Notice 2017-64, 2017-45 IRB.

 
The following is a complete list of contribution changes:
 

401(k)

• Annual contribution limit - changes to your election can be made any time during the year
     o 2017 - $18,000
     o 2018 - $18,500

• Catch-up limit
     o 2018 - stays the same at $6,000 for employees age 50+

SEP IRAs and Solo 401(k)s

• Contribution limits for self-employed and small business owners
     o 2017 - $54,000
     o 2018 - $55,000

After-tax 401(k) contributions

• 2018 - $55,000 (overall cap, including the $18,500 (pre-tax or Roth) salary deferrals plus any employer contributions (but not catch-up contributions))

SIMPLE retirement accounts

• 2018 - stays the same at $12,500, as well as the same catch-up limit of $3,000

Defined benefit plans

• 2017 - $215,000
• 2018 - $220,000

Transportation and parking benefits - for transportation in a commuter highway vehicle or any transit pass, as well as qualified parking

• 2017 - $255
• 2018 - $260

Health FSA

• 2017 - $2,600
• 2018 - $2,650

You may also view this alert directly on our corporate website by clicking here.



 

 

Recent News