On October 19, 2017, the IRS released the cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2018. It provided technical guidance in Notice 2017-64. While much stays the same, after three years the amount you can contribute to your 401(k) workplace retirement plan increased by $500.
Highlights of other changes for 2018 include:
- Income ranges for determining eligibility to make deductible contributions to traditional individual retirement arrangements (IRAs) and Roth IRAs and to claim the Saver’s Credit all increased.
- Phase-out ranges for traditional IRA contribution deductions increased for single taxpayers (covered by a workplace retirement plant), married couples filing jointly (where the contributing spouse is covered by a workplace retirement plan), and IRA contributors not covered by a workplace retirement plan (but married to someone who is).
- Income phase-out ranges for Roth IRA contributors increased for singles, heads of households, and married couples filing jointly.
- The income limit for the Saver’s Credit for low- and moderate-income workers increased for married couples filing jointly, heads of households, and for singles and married individuals filing separately.
2018 Retirement Plan Contribution Limits and Pension Plan Limitations
1. Employee deferrals to all 401(k) and 403(b) plans must be aggregated for purposes of this limit. A lower limit applies to SIMPLE plans.
2. Available to employees age 50 or older during the calendar year. A lower limit applies to SIMPLE plans.
3. All annual compensation from a SIMPLE employer (including all members of a controlled group) must be aggregated for purposes of this limit.
4. For the 2018/2017 plan year, an employee who earns more than $120,000 in 2016 is a Highly Compensated Employee (“HCE”).
To read the entire IRS announcement, please see IR-2017-64
. (Link opens new document in .pdf format.)
For more information about these and other retirement, pension, and employee benefit plan regulations, please contact Theresa McDowell
at 303-740-9400 or firstname.lastname@example.org