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Retirement plan limitation changes may affect your employee benefit plans

Retirement Plan Limitations for 2017

As an ongoing service to our clients, EisnerAmper LLP is providing this Alert to keep you abreast of the recent changes affecting employee benefit plans.

The Internal Revenue Service announced on October 27 the cost-of-living adjustments applicable to the dollar limitations for defined contribution and defined benefit plans for the tax year 2017. A few of the limits have changed from 2016, as noted below.

Code Section 2017   2016 2015
IRAs 
IRA Contribution Limit – 219(b)(5)(A)     $5,500 5,500  5,500 
IRA Catch-Up Contributions – 219(b)(5)(B)     $1,000 1,000  1,000 
  
IRA AGI Deduction Phase-out Starting at 
Joint Return        $99,000 98,000  98,000 
Single or Head of Household     $62,000 61,000  61,000 
SEP 
SEP Minimum Compensation – 408(k)(2)(C)        $600 600  600
SEP Maximum Compensation – 408(k)(3)(C)     $270,000 265,000  265,000 
401(k), 403(b), Profit-Sharing Plans, etc. 
Annual Compensation – 401(a)(17)/404(l)     $270,000 265,000  265,000 
Elective Deferrals – 402(g)(1)     $18,000 18,000 18,000
Catch-up Contributions – 414(v)(2)(B)(i)     $6,000 6,000 6,000
Defined Contribution Limits – 415(c)(1)(A)      $54,000 53,000  53,000 
ESOP Limit – 409(o)(1)(C) – Account Balance     $1,080,000 1,070,000   1,070,000 
ESOP Limit – 409(o)(1)(C) – Lengthening 5-Year Period $215,000 210,000  210,000 
Other 
HCE Threshold – 414(q)(1)(B)               $120,000 120,000  120,000 
Defined Benefit Annual Limit – 415(b)(1)(A)     $215,000 210,000  210,000 
Key Employee – 416(i)(1)(A)(i)     $175,000 170,000  170,000 
457 Elective Deferrals – 457(e)(15)     $18,000 18,000 18,000 
Control Employee – 1.61-21(f)(5)(i)       $105,000 105,000  105,000 
Control Employee – 1.61-21(f)(5)(iii)     $215,000 215,000  210,000 
Social Security Taxable Wage Base     $127,200 118,500 118,500 
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Peter Alwardt is a Tax Partner specializing in employee benefits, tax and ERISA issues for domestic and international clients. He is a member of the American Institute of Certified Public Accountants and NY State Society of CPAs.

Barry Levine is a Tax Director specializing in employee benefits, tax and ERISA issues. He has written articles on employee benefit legal issues for various legal and employee benefits professional publications.