The Internal Revenue Service has announced various 2018 benefit plan limits and thresholds. There are increases from 2017 in some cases, but in other instances, the 2017 amounts will continue to apply.

Retirement and Welfare Benefit Plans

The following chart shows the major 2017 and 2018 benefit plan limits and thresholds. If the applicable limit/threshold increased for 2018, the 2018 amount is shown in boldface.

Limit or Threshold 2017 2018

Maximum salary-reduction contribution for an individual to a 401(k) plan or a 403(b) plan or to most 457 plans

$18,000

$18,500

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 215,000 220,000
Maximum “annual addition” under a qualified defined contribution plan

54,000

55,000

Maximum compensation for an individual that can be taken into account under a qualified plan

270,000

275,000

Maximum compensation for an individual that can be taken into account under certain governmental plans 400,000 405,000
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 175,000 175,000
Dollar amount for determining the maximum account balance in an employee stock ownership plan subject to a five-year distribution period 1,080,000 1,105,000
Dollar amount used to determine the lengthening of the five-year distribution period under an employee stock ownership plan 215,000 220,000
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 2,600 2,650
Maximum annual contribution for an individual with self-only coverage under a high-deductible health plan (HDHP) 3,400 3,450
Maximum annual contribution for an individual with family coverage under an HDHP 6,750 6,900
Minimum annual deductible under an HDHP with self-only coverage 1,300 1,350
Minimum annual deductible under an HDHP with family coverage 2,600 2,700
Maximum out-of-pocket expense limit under an HDHP with self-only coverage 6,550 6,650
Maximum out-of-pocket expense limit under an HDHP with family coverage 13,100 13,300

Individual Retirement Accounts

The following limits will apply to IRAs in 2018:

  • 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 2018 AGI is between $189,000 and $199,000, up from $186,000 to $196,000 for 2017. For married couples filing jointly, where the spouse who makes the IRA contribution is covered by a workplace retirement plan, the 2018 AGI phase-out range is $101,000 to $121,000, up from $99,000 to $119,000 for 2017. For single individuals and heads of household who are covered by a workplace retirement plan, the 2018 AGI phase-out range is $63,000 to $73,000, up from $62,000 to $72,000 for 2017. 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 2018 AGI phase-out range for taxpayers making contributions to Roth IRAs in 2018 is $189,000 to $199,000 for married couples filing jointly, up from $186,000 to $196,000 for 2017. For single individuals and heads of household, the 2018 AGI phase-out range is $120,000 to $135,000, up from $118,000 to $133,000 for 2017.

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 2018 will be $128,700. The 2017 wage base is $127,200.