The Internal Revenue Service (IRS) has announced various 2017 benefit plan limits and thresholds. There are increases from 2016 in some cases, but in other instances the 2016 amounts will continue to apply.

Benefit Plans

The following chart shows the major 2016 and 2017 benefit plan limits and thresholds. Increased amounts for 2017 are shown in boldface.

Limit or Threshold 2016 2017
Maximum salary-reduction contribution for an individual to a 401(k) plan or a 403(b) plan or to most 457 plans $18,000 $18,000
Maximum catch-up contribution for an individual age 50 or older, to a 401(k) plan or 403(b) plan or to most 457 plans 6,000 6,000
Maximum annual benefit under a qualified defined benefit plan 210,000 215,000
Maximum “annual addition” under a qualified defined contribution plan 53,000 54,000
Maximum compensation for an individual that can be taken into account under a qualified plan 265,000 270,000
Maximum compensation for an individual that can be taken into account under certain governmental plans 395,000 400,000
Minimum annual compensation for an individual to be treated as a “highly compensated employee” for the following year 120,000 120,000
Minimum annual compensation for an officer to be treated as a “key employee” as to a qualified plan 170,000 175,000
Dollar amount for determining the maximum account balance in an employee stock ownership plan subject to a five-year distribution period 1,070,000 1,080,000
Dollar amount used to determine the lengthening of the five-year distribution period under an employee stock ownership plan 210,000 215,000
Maximum salary-reduction contribution for an individual to a SIMPLE retirement plan 12,500 12,500
Maximum catch-up contribution for an individual age 50 or older to a SIMPLE retirement plan 3,000 3,000
Limit on voluntary employee salary-reduction contributions to a health flexible-spending arrangement under a cafeteria plan 2,550 2,600
Monthly limit on aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and for any transit pass 255 255
Monthly limit on aggregate fringe benefit exclusion amount for qualified parking 255 255
Maximum annual contribution for an individual with self-only coverage under a high-deductible health plan (HDHP) 3,350 3,400

Individual Retirement Accounts (IRAs)

The following limits will apply to IRAs in 2017:

  • The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals age 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The deduction for contributions to a traditional IRA is phased out for those who have modified adjusted gross incomes (AGI) within a certain range. 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 2017 AGI is between $186,000 and $196,000, up from $184,000 to $194,000 for 2016. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the 2017 AGI phase-out range is $99,000 to $119,000, up from $98,000 to $118,000 for 2016. For single individuals and heads of household who are covered by a workplace retirement plan, the AGI phase-out range is $62,000 to $72,000, up from $61,000 to $71,000 for 2016. 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 AGI phase-out range for taxpayers making contributions to a Roth IRA in 2017 is $186,000 to $196,000 for married couples filing jointly, up from $184,000 to $194,000 for 2016. For single individuals and heads of household, the 2017 AGI phase-out range is $118,000 to $133,000, up from $117,000 to $132,000 for 2016.

Wage Base for Social Security Tax

In addition to the above adjustments, the Social Security Administration has announced that the wage base for Social Security taxes for 2017 will be $127,200. The 2016 wage base is $118,500.