IRS Announces 2018 Cost of Living Adjustments
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2 min read
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Tagged: COLA, cost of living adjustment, defined benefit, defined contributino, ESOP, FSA, HDHP, health and welfare, HSA, key employee, maximum\, qualified retirement, simple
Matthew P. Chiarello
Partner
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This post has been updated as of June 7, 2018, to reflect the revised maximum annual HSA contribution limit for family coverage set out in Revenue Procedures 2018-18 and 2018-27. The IRS recently announced cost-of-living adjustments for 2018 in Notice 2017-64 and related guidance. The key dollar limits for qualified retirement plans and health and welfare plans are noted below. Qualified Retirement Plan Dollar Limits |
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| 2017 | 2018 | |
| Limit on Section 401(k) deferrals (Section 402(g)) | $18,000 | $18,500 |
| Dollar limitation for catch-up contributions (Section 414(v)(2)(B)(i)) | $6,000 | $6,000 |
| Limit on deferrals for government and tax-exempt organization deferred compensation plans (Section 457(e)(15)) | $18,000 | $18,500 |
| Annual benefit limitation for a defined benefit plan (Section 415(b)(1)(A)) | $215,000 | $220,000 |
| Limitation on annual contributions to a defined contribution plan (Section 415(c)(1)(A)) | $54,000 | $55,000 |
| Limitation on compensation that may be considered by qualified retirement plans (Section 401(a)(17)) | $270,000 | $275,000 |
| Dollar amount for the definition of highly compensated employee (Section 414(q)(1)(B)) | $120,000 | $120,000 |
| Dollar amount for the definition of a key employee in a top-heavy plan (Section 416(i)(1)(A)(i)) | $175,000 | $175,000 |
| Dollar amount for determining the maximum account balance in an ESOP subject to a five-year distribution period (Section 409(o)(1)(C)(ii)) | $1,080,000 | $1,105,000 |
| SIMPLE retirement account limitation (Section 408(p)(2)(E)) | $12,500 | $12,500 |
| Social Security Taxable Wage Base | $127,200 | $128,700 |
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Health and Welfare Plan Dollar Limits |
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| 2017 | 2018 | |
| Annual Cost Sharing Limit (self-only coverage) | $7,150 | $7,350 |
| Annual Cost Sharing Limit (other than self-only coverage) | $14,300 | $14,700 |
| HDHP Out-of-Pocket Maximum (self-only coverage) | $6,550 | $6,650 |
| HDHP Out-of-Pocket Maximum (family coverage) | $13,100 | $13,300 |
| Annual HDHP Deductible (self-only coverage) | Not less than $1,300 | Not less than $1,350 |
| Annual HDHP Deductible (family coverage) | Not less than $2,600 | Not less than $2,700 |
| Maximum Annual HSA Contributions (self-only coverage) | $3,400 | $3,450 |
| Maximum Annual HSA Contributions (family coverage) | $6,750 | $6,900* |
| Maximum HSA Catch-Up Contribution | $1,000 | $1,000 |
| Health Flexible Spending Account Maximum | $2,600 | $2,650 |
* The maximum annual HSA contribution for family coverage was reduced from $6,900 to $6,850 by Revenue Procedure 2018-18. However, the IRS reinstated the $6,900 limit in Revenue Procedure 2018-27. For more information about Revenue Procedure 2018-27, please see our blog dated May 2, 2018.