Key 2016 Plan Limits Announced

Written by benefitexpress | October 22, 2015

IRS Announces Key Plan Limitations for 2016

This announcement is a summary of the issuance of the 10/15 Social Security Administration rp-15-53 and the 10/21 IRS News Release IR-2015-118. It covers cost of living adjustments applicable to dollar limitations for qualified retirement plans, and other limits for tax year 2016.

Retirement Limits

Plan 2016 Limit 2015 Limit
401(k) / 403(b) / 457(b) deferrals $18,000 $18,000
415(c) Limit $53,000 $53,000
Annual Benefit Limit (Defined Benefit Plans) $210,000 $210,000
Annual Compensation Limit $265,000 $265,000
Social Security Taxable Wage Base $118,500 $118,500
Catch-up Contribution Limit for 401(k) / 403(b) / 457(b) $6,000 $6,000

Flexible Benefit Related Limits

Plan 2016 Limit 2015 Limit
Key Employee Limit, Officer Test $170,000 $170,000
Highly Compensated Employees (Sec.414q) $120,000 $120,000
Health Care Flexible Spending Account $2,550 $2,550
Dependent Care Flexible Spending Account $5,000 $5,000

Health Savings Account Limits

Plan 2016 Limit 2015 Limit
Single Level for Medical Coverage $3,350 $3,350
Family Level for Medical Coverage $6,750 $6,650
Catch-Up Contributions (Age 55 or Older) $1,000 $1,000

Transportation Limits

Plan 2016 Limit 2015 Limit
Transit (monthly maximum) $255 $130 (retroactively raised to $250)
Parking (monthly maximum) $255 $250

Helpful Links

2016 limits reflect issuance of IRS News Release IR-2015-118 released October 21, 2015, and Social Security Administration News Release released October 15, 2015.

The IRS news release can be viewed at: https://www.irs.gov/pub/irs-news/IR-15-118.pdf.

To view the Revenue Ruling 2015-53, please visit: https://www.irs.gov/pub/irs-drop/rp-15-53.pdf.

Are You a Visual Learner?

No problem! We've got you covered. View our 2016 Indexed Figures for Qualified Plans infographic.

Topics: Legislative Update