The Internal Revenue Service recently released the 2018 annual contribution limits for Health Flexible Spending Accounts as well as IRC types 403(b) and 457(b).
Health Flexible Spending Accounts
The annual limit on voluntary employee salary reductions for contributions to a health flexible spending account will be $2,650 in 2018, which is an increase from the prior limit of $2,600. The limit increase will apply when the employer’s FSA plan year begins. For example, if the plan year begins on June 1, the limit increase will kick in on June 1, 2018 during the open enrollment period.
| Health Flexible Spending Accounts Contribution Limits | |
| Tax Year | Annual Limit |
| 2018 | $2,650 |
| 2017 | $2,600 |
For more information on the increased Health FSA limits, review Revenue Procedure 2017-58.
403(b) Retirement Plans, Elective Contributions (TSA)
The annual elective deferral limit will be $18,500 in 2018, which is an increase from the prior limit of $18,000.
The following limits will remain unchanged in 2018:
- If you qualify for the full amount of the lifetime catch-up, the catch-up contribution limit remains unchanged at $3,000. This brings the annual total limit for employees who qualify for the lifetime catch-up to $21,500.
- The catch-up contribution limit for employees who are age 50 or over remains unchanged at $6,000. This brings the annual total limit for employees who qualify for the age 50+ catch-up to $24,500.
| 403(b) Plan Contribution Limits | ||||
| Tax Year | Basic Deferral Limit for All Employees | Annual Limit if you Qualify for the Full Amount of the Lifetime Catch-Up (15 Years of Service). Total Lifetime Catch-Up Max of $15,000 | Annual Limit if You Qualify for the Age 50+ Catch-Up | Maximum Annual Contribution if You Qualify for Both the Age 50+ and Lifetime Catch-Ups |
| 2018 | $18,500 | $21,500 | $24,500 | $27,500 |
| 2017 | $18,000 | $21,000 | $24,000 | $27,000 |
For more information on the increased 403(b) limits, review the IRS article, IRS Announces 2018 Pension Plan Limitations.
457(b) Retirement Plans, Elective Contributions (TSA)
The annual elective deferral limit will be $18,500 in 2018, which is an increase from the prior limit of $18,000.
The following limits will remain unchanged in 2018:
- The catch-up contribution limit for employees who are age 50 or over remains unchanged at $6,000. This brings the annual total limit for employees who qualify for the age 50+ catch-up to $24,500.
| 457(b) Plan Contribution Limits | ||
| Tax Year | Basic Deferral Limit for All Employees | Annual Limit if You Qualify for the Age 50+ Catch-Up |
| 2018 | $18,500 | $24,500 |
| 2017 | $18,000 | $24,000 |
For more information on the increased 457(b) limits, review the IRS article, IRS Announces 2018 Pension Plan Limitations.
403(b) and 401(a) Retirement Plans, Employer-Sponsored
(aka, MidAmerica’s Special Pay Plan)
The annual Section 415(c) contribution limits for 403(b) and 401(a) have increased from $54,000 in 2017 to $55,000 in 2018.
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