The IRS recently announced the contribution limits to 401(k) plans for 2017. You can view the IRS announcement by clicking here.
Important takeaways for employers from the announcement include:
- The amount of money that employees under 50 can contribute to their 401(k) plans remains unchanged at $18,000. The amount that employees over 50 can contribute also remains unchanged at $24,000. The levels remain unchanged due to the small increase in inflation over the past year.
- The amount that employers can contribute to a 401(k) plan increased slightly from $35,500 to $36,000, and the total amount that can be contributed to a 401(k) plan increased from $53,500 to $54,000.
- Here is a table listing the contribution limits to 401(k) plans going back to 2011:
Year
|
Employee Contribution Limit
|
Maximum Employer Contribution
|
Maximum for All Contributions
|
Catch-up
Amount
|
2017
|
$18,000
|
$36,000
|
$54,000
|
$6,000
|
2016
|
$18,000
|
$35,500
|
$53,500
|
$6,000
|
2015
|
$18,000
|
$35,000
|
$53,000
|
$6,000
|
2014
|
$17,500
|
$34,500
|
$52,000
|
$5,500
|
2013
|
$17,500
|
$33,500
|
$51,000
|
$5,500
|
2012
|
$16,500
|
$33,000
|
$50,000
|
$5,500
|
2011
|
$16,500
|
$32,500
|
$49,000
|
$5,500
|
- The income level of a “highly-compensated employee” remained unchanged at $120,000. The regulations governing 401(k) plans prohibit the average contributions of highly-compensated employees from exceeding the average contribution of non-highly compensated employees by more than 2%.
- The income levels of employees eligible to receive deductions for contributions to Individual Retirement Accounts (IRAs) increased $1,000 for single employees and $2,000 for married couples filing jointly.
For questions regarding your 401(k) plan, or anything else relating to employee benefits, contact us.
