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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