IRS Announces 2018 Contribution Limits for 401(k)s, FSAs, and More

IRS Announces 2018 Contribution Limits for 401(k)s, FSAs, and More

 

 

 

 

 

 

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.

Complete list of contribution changes:

401(k)

  • Annual contribution limit – changes to your election can be made any time during the year
    • 2017 – $18,000
    • 2018 – $18,500
  • Catch-up limit
    • 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
    • 2017 – $54,000
    • 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

 Links:
IRS Rev. Proc. 2017-58
IRS Notice 2017-64

For more information contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.