2017 Dollar Amounts and COLAs for Benefit Plans and Taxes

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The IRS and Social Security Administration each year announce the cost-of-living adjustments affecting tax and employee benefits dollar amounts for the upcoming calendar year. Some highlights for 2017 (& 2016) are listed below. Note that the annual cap on employee pre-tax contributions to a Health FSA (IRC § 125) has increased to $2,600.

Tax Benefit	2017	2016
Highly Compensated Employee (HCE) Threshold – IRC §414(q)(1)(B)	$120,000	$120,000
Key Employee, Officer – IRC § 416(i)(1)(A)(i)	$175,000	$170,000
Social Security Taxable Wage Base – § 2230 of Social Security Act	$127,200	$118,500
401(k), 403(b), Profit-Sharing Plans:
Maximum Elective Deferrals (annually) – IRC § 402(g)(1)	$18,000	$18,000
Catch-up Contributions (for those age 50 and older)	$ 6,000	$ 6,000
Annual Compensation – IRC § 401(a)(17)	$270,000	$265,000
Annual Defined Contribution Limits – IRC § 415(c)(1)(A)	$54,000	$53,000
Individual Retirement Accounts (IRAs):
IRA Contribution Limit	$5,500	$5,500
IRA Catch-up Contributions (age 50 and older)	$1,000	$1,000
Health Savings Accounts (H.S.A.s): IRC § 223(b)(2)(A)
Maximum Annual Contribution – Individual Coverage	$3,400	$3,350
Maximum Annual Contribution – Family Coverage	$6,750	$6,750
Catch-up Contribution – age 55 and over – IRC § 223(b)(2)(A)	$1,000	$1,000
High Deductible Health Plan (HDHP): IRC § 223(c)(2)(A)
Minimum Annual Deductible – Individual Coverage	$1,300	$1,300
Minimum Annual Deductible – Family Coverage	$2,600	$2,600
Maximum Out-of-Pocket Expenses – Individual Coverage	$6,550	$6,550
Maximum Out-of-Pocket Expenses – Family Coverage	$13,100	$13,100
Dependent Care Assistance Plan (DCAP) & Health Flexible Spending Account (HFSA) Maximum Annual Pre-tax Contribution through 125 Plan:
DCAP if employee is married and filing a joint return or is a single parent filing as “House of Household” – IRC § 129	$5,000	$5,000
DCAP if employee is married but filing a separate return from spouse	$2,500	$2,500
HFSA, regardless of marital status	$2,600	$2,550
Adoption Credit & Exclusion from Income (may take both if enough expenses):
Adoption Tax Credit (phases out between AGI of $203,540 and $243,540) – IRC § 23	$13,570	$13,460
Adoption Assistance, Maximum Annual Pre-tax Contribution through 125 Plan – IRC § 137	$13,570	$13,460
Qualified Transportation Benefits: IRC § 132(f)
Parking – monthly maximum	$255	$255
Vanpooling & Transit – monthly maximum	$255	$255
Personal Income Tax Filing Amounts IRC § 63(c)(2)
Dependent Exemption – IRC § 151(d)	$ 4,050	$ 4,050
Standard Deduction, Married Filing Jointly (MFJ)	$12,700	$12,600
Standard Deduction, Head of Household	$ 9,350	$ 9,300
Standard Deduction, Single or Married Filing Separately	$ 6,350	$ 6,300
Medicare Part B:
Medicare Part B Premium (existing “hold harmless” enrollees) – estimated	$105.20	$104.90
Medicare Part B Deductible	$ 204	$166
Small Business Health Care Tax Credit
Maximum tax credit phases out if employer’s average annual wages are in excess of this dollar amount. Rev. Proc. 2016-55	$26,200	$25,900
Affordable Care Act Amounts
Annual 5000A(c) penalty for individual not having “minimum essential coverage” (MEC): greater of dollar amount or a percentage of modified adjusted gross income (MAGI) – file Form 8965 if a tax is due	$695 or 2.5%	$395 or 2.0%
Annual 4980H(a) penalty for large employer not offering MEC to at least 95% (70% in 2015) of full-time employees. Penalty amount is times total number of full-time employees minus 30 (minus 80 in 2015)	Not yet announced	$2,160
Annual 4980H(b) penalty for large employer not offering affordable minimum value coverage to all full-time employees. Penalty amount is per each full-time employee who qualifies for a subsidy to buy insurance in the marketplace.	Not yet announced	$3,240