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Updated Employee Benefit Plan and IRA Quick Reference Table 2015 and 2016

Updated Employee Benefit Plan and IRA Quick Reference Table 2015 and 2016

Oct 23, 2015

The Internal Revenue Service has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2016(1). Many of the pension plan limitations will not change for 2016 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits. Communications that specify benefit plan limits should be reviewed for accuracy before materials are given to participants.

2015 2016
Compensation limit—IRC Sec. 401(a)(17) $265,000 $265,000
Defined benefit plan annual benefit limit $210,000 $210,000
Defined contribution plan annual contribution limit $53,000 $53,000
Social Security tax wage base $118,500 $118,500
Highly compensated employee compensation threshold $120,000 $120,000
Key employee officer compensation threshold $170,000 $170,000
SEP compensation threshold $600 $600
401(k), 403(b), and SARSEPs
Elective deferral limit(2) $18,000 $18,000
Catch-up contribution(3) $6,000 $6,000
457 Plan
Elective deferral limit(2) $18,000 $18,000
Catch-up contribution(3) $6,000 $6,000
SIMPLE Plan
Elective deferral limit(2) $12,500 $12,500
Catch-up contribution(3) $3,000 $3,000
IRA
Elective deferral limit(2) $5,500 $5,500
Catch-up contribution(3) $1,000 $1,000
Traditional IRA deduction phaseout (AGI)
Single, Head of Household—active participant $61,000/$71,000 $61,000/$71,000
Married Filing Separate—any spouse participates $0/$10,000 $0/$10,000
Married Filing Joint—nonparticipating spouse $183,000/$193,000 $184,000/$194,000
Married Filing Joint—participating spouse $98,000/$118,000 $98,000/$118,000
Roth IRA contribution eligibility (AGI)
Married Filing Joint $183,000/$193,000 $184,000/$194,000
Single, Head of Household $116,000/$131,000 $117,000/$132,000
Married Filing Separate—any spouse participates $0/$10,000 $0/$10,000
Retirement saver’s credit eligibility (AGI)
Married Filing Joint $61,000 $61,500
Head of Household $45,750 $46,125
Married Filing Separate, Single $30,500 $30,750
(1) This table has been updated based on IRS News Release (IR-2015-118), October 21, 2015.
(2) This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs, and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
(3) Catch-up contributions are available each year to individuals who reach age 50 by December 31.

 

If you have any questions, or for more information about the 2016 cost-of-living adjustments for retirement plans, please contact Pam BranshawTom KriegBob Buss, or your Wipfli relationship executive.