Employee Benefits Compliance, Taxes, Fees & Penalties

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

 

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