HR Alert- 2017 Contribution Limits

 

Inflation in 2016 remained low. Many of the federal contribution levels are unchanged from 2016.  Biggest change is the Social Security Wage Base.

 

  • The Social Security Wage Base for 2017 increases significantly from $118,500 in 2016 to $127,200 for 2017, an increase of over 7%. The maximum yearly Social Security tax withholding amount increases $539 from $7,347 to $7,886 (6.2% of $127,200).  The 6.2% Social Security tax contributed by the employee is matched by the employer.

 

  • Medicare tax remains at 1.45% for most employees (matched at 1.45% by employers) with no limit on income.

 

  • The maximum annual amount an employee can contribute to a 401(k) Plan during 2017 remains unchanged at $18,000. Employees age 50 and above can contribute an additional “catch-up” contribution of $6,000, for a total maximum contribution of $24,000.

 

  • The maximum annual amount an employee can contribute to a traditional IRA or a Roth IRA in 2017 remains unchanged at $5,500; the additional catch-up contribution for employees age 50 and above remains $1,000, for a total contribution of up to $6,500.

 

  • Simple IRA’s have a maximum annual contribution of $12,500 for employees in 2017. Employees age 50 and above have a catch-up contribution limit of $3,000, and a total contribution limit of $15,500 in 2017.

 

  • The Dependent Care annual limit under Section 125 remains at $5,000 for married and filing joint returns and $2,500 for married filing separate returns.

 

  • The limit on contributions to Flexible Spending Accounts increases from $2,550 in 2016 to $2,600 in 2017.

 

  • Amendment 70 passed in November, mandating increasing the Colorado minimum wage to $12.00 per hour by January 1, 2020.  Colorado’s Minimum Wage increases from $8.31 per hour to $9.30 per hour, effective January 1, 2017.  The Tipped Employee’s Minimum Wage increases January 1, 2017 to $6.28 per hour.

 

  • The 2017 IRS standard mileage rates are: $0.53.5 cents per mile for business miles driven (down from $0.54 in 2016); $0.17 cents per mile for medical or moving purposes (down from $0.19 in 2016; and $0.14 cents per miles driven in service of charitable organizations (unchanged).

 

  • Employers are required to comply with the following federal legislation (number of employees listed in parenthesis):

> Immigration Reform and Control Act (Form I-9) (1 or more employees) Note: revised Form I-9 must be used by no later than January 22, 2017

> Colorado Affirmation Form has been repealed and is no longer used by Colorado employers

> USERRA (1 or more employees)

> Fair Labor Standards Act (1 or more employees) Note: Proposed overtime rules not in effect- stay tuned

> Americans with Disabilities Act (15 or more employees)

> Age Discrimination in Employment Act (20 or more employees)

> Family and Medical Leave Act (50 or more employees)

> EEO-1 Reports (100 or more employees; 50 or more for federal contracts)

 

Frazier International sends the HR Alert to our business clients and colleagues to keep you informed of the latest developments in the HR world.  Please feel free to contact us at 303.875.5078 if you have any questions about this latest HR Alert, or if we can assist you in any way with your Human Resource needs.

 

Merry Christmas, Happy Hanukkah, and Happy New Year to all!  2017 promises to be a year of significant changes in HR and we will keep you updated as events unfold.

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