Retirement Plan Limits
The IRS updated the retirement plan limits effective for the plan year that begins on or after January 1, 2015. A comparison of the 2014 and 2015 limits is listed below.
| 2014 | 2015 | |
| Maximum Elective Deferrals to §401(k), §403(b), and §457(b) Plans | $17,500 | $18,000 |
| Maximum Catch-up Elective Deferrals to Plans other than SIMPLE Plans (age 50 by the end of the year) | $5,500 | $6,000 |
| Section 415 Limits Defined Contribution Plan Annual Addition Maximum Defined Benefit Plan Dollar Maximum |
$52,000 $210,000 |
$53,000 $210,000 |
| Annual Compensation Limit under §§401(a)(17), 404(l) and 408(k) | $260,000 | $265,000 |
| §414(q) Highly Compensated Employee definition | $115,000 | $120,000 |
| §416(i) Top-Heavy Compensation – Used to determine officers as key employees | $170,000 | $170,000 |
| §409(o) Maximum ESOP Account Balance Subject to 5-Year Distribution Period | $1,050,000 | $1,070,000 |
| ESOP Amount Used to Determine Extensions of the 5-Year Distribution Period | $210,000 | $210,000 |
| §408A Maximum Roth IRA
Contribution (AGI Limit) Married Filing Joint Return or Qualifying Widower All other Taxpayers (other than married filing separately) |
$181,000 $114,000 |
$183,000 $116,000 |
Social Security Tax and Wage Base
For calendar year 2015, the Social Security taxable wage base increases to $118,500 (up from $117,000 in 2014).
Medicare Tax
The regular Medicare tax rate of 1.45% remains unchanged and applies to all income without a limitation for both the employee and employer portion. However, the Affordable Care Act included an additional Medicare tax of 0.9%. The additional Medicare tax applies to wages, other compensation, and self-employment income over certain dollar thresholds ($200,000 for single and $250,000 for married filing jointly). The additional Medicare tax only applies to the employee and not the employer. Final IRS regulations require an employer to withhold the additional Medicare tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year.
Health and Fringe Benefit Plan Limits
Updated health and fringe benefit plan adjustments also apply for the 2015 calendar year. A comparison of the 2014 and 2015 limits is listed below.
| 2014 | 2015 | |
| Health Savings Accounts – HDHP
Limits (§223(c)(2)(A)) HDHP Minimum Annual Deductible – Self Only HDHP Minimum Annual Deductible – Family HDHP Out-of-Pocket Maximum – Self Only HDHP Out-of-Pocket Maximum – Family |
$1,250 $2,500 $6,350 $12,700 |
$1,300 $2,600 $6,450 $12,900 |
| Health Savings Accounts –
Maximum Contribution Limits (§223(b)) Self Only Family Catch-Up Contributions (age 55 by the end of the year) |
$3,300 $6,550 $1,000 |
$3,350 $6,650 $1,000 |
| Out-of-Pocket Maximum – PHSA
§2707(b) Limits Self Only Family |
$6,350 $12,700 |
$6,600 $13,200 |
| Transportation Fringe Benefits
– Monthly Limits (§132(f)(2)) Parking Transit Passes and Vanpooling (combined)* |
$250 $130/$250* |
$250 $130 |
| Health FSA Contribution Limit (§125(i)) | $2,500 | $2,550 |
| Employer Adoption Assistance
Exclusion (§137) Maximum Gross Income Exclusion Maximum AGI Limit (after which exclusion phases out) |
$13,190 $197,880 |
$13,400 $201,010 |
*The limit for transit passes was $130 for 2014. However, in December 2014, Congress passed H.R. 5771, the Tax Increase Prevention Act of 2014, which retroactively increased the transit pass limit for calendar year 2014 to $250. This increase does not apply to 2015.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
