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401k and Retirement Plan Limits for the Tax Year 2017
On October 27, 2016, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the tax year of 2017.
Highlights of Limitations That Remain Unchanged From 2016
- The contribution limit for employees who participate in 401k, 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $18,000.
- The catch-up contribution limit for employees aged 50 and over who participate in 401k, 403(b), most 457 plans, and the federal government's Thrift Savings Plan remains unchanged at $6,000.
- The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
| Chart of Select Limits |
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| 401k Plan Limits for Year |
2017 |
2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
| 401k Elective Deferrals |
$18,000 |
$18,000 |
$18,000 |
$17,500 |
$17,500 |
$17,000 |
$16,500 |
| Annual Defined Contribution Limit |
$54,000 |
$53,000 |
$53,000 |
$52,000 |
$51,000 |
$50,000 |
$49,000 |
| Annual Compensation Limit |
$270,000 |
$265,000 |
$265,000 |
$260,000 |
$255,000 |
$250,000 |
$245,000 |
| Catch-Up Contribution Limit |
$6,000 |
$6,000 |
$6,000 |
$5,500 |
$5,500 |
$5,500 |
$5,500 |
| Highly Compensated Employees |
$120,000 |
$120,000 |
$120,000 |
$115,000 |
$115,000 |
$115,000 |
$110,000 |
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| Non-401k Related Limits |
| 403(b)/457 Elective Deferrals |
$18,000 |
$18,000 |
$18,000 |
$17,500 |
$17,500 |
$17,000 |
$16,500 |
| SIMPLE Employee Deferrals |
$12,500 |
$12,500 |
$12,500 |
$12,000 |
$12,000 |
$11,500 |
$11,500 |
| SIMPLE Catch-Up Deferral |
$3,000 |
$3,000 |
$3,000 |
$2,500 |
$2,500 |
$2,500 |
$2,500 |
| SEP Minimum Compensation |
$600 |
$600 |
$600 |
$550 |
$550 |
$550 |
$550 |
| SEP Annual Compensation Limit |
$270,000 |
$265,000 |
$265,000 |
$260,000 |
$255,000 |
$250,000 |
$245,000 |
| Social Security Wage Base |
$127,200 |
$118,500 |
$118,500 |
$117,000 |
$113,700 |
$110,100 |
$106,800 |
Download a PDF of this chart.
Highlights of Changes for 2017
The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the saver's credit all increased for 2017.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2017:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000, up from $61,000 to $71,000.
- For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000, up from $98,000 to $118,000.
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $186,000 and $196,000, up from $184,000 and $194,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000. For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The income limit for the saver's credit (also known as the retirement savings contributions credit) for low- and moderate-income workers is $62,000 for married couples filing jointly, up from $61,500; $46,500 for heads of household, up from $46,125; and $31,000 for singles and married individuals filing separately, up from $30,750.
The next page contains details on both the unchanged and adjusted limitations for 2017.
(More...)
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