Understanding Employee Benefits

IRS Annual Limits on Qualified Plans

By | October 22, 2015

The Internal Revenue Service has released the 2016 cost of living adjustments affecting dollar limits on benefits and contributions under qualified retirement plans and health savings accounts, which are largely unchanged from the 2015 numbers. https://www.irs.gov/pub/irs-news/IR-15-118.pdf.  The following chart summarizes the 2016 retirement plan limits and other benefit plan limits.  The 2015 limits are provided for reference purposes.

2015 2016
Elective Deferral Limit 401(k), 403(b), 457(b) $18,000 $18,000
Catch-up Limit (age 50+) $6,000 $6,000
Defined Benefit Limit $210,000 $210,000
Defined Contribution Limit $53,000 $53,000
Dollar Limit – Highly Compensated Employees $120,000 $120,000
Officer-Key Employee $170,000 $170,000
Annual Compensation Limit $265,000 $265,000
SEP Eligibility Compensation Limit $600 $600
SIMPLE Deferral Limit $12,500 $12,500
SIMPLE Catch-up Limit (age 50+) $3,000 $3,000
Social Security Taxable Wage Base $118,500 $118,500
ESOP 5 Year Distribution Extension
Account Minimum $1,070,000 $1,070,000
Additional amount for 1 year extension $210,000 $210,000
HSA (self/family)
Maximum Annual Contribution $3,350/$6,650 $3,350/$6,750
HDHP minimum deductible limits $1,300/$2,600 $1,300/$2,600
Out-of-pocket expense annual maximum $6,450/$12,900 $6,550/$13,100

 

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