Employees will be allowed to contribute up to $18,000 to their defined contribution plans in tax year 2016, the same as 2015, the IRS announced Wednesday.
The IRS said the contribution limits for employees participating in 401(k), 403(b), most 457 plans and the federal government's $443.3 billion Thrift Savings Plan, Washington, will remain at $18,000 “because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment,” the agency said in a news release.
Employees aged 50 and over will be able to contribute an additional $6,000, also the same as in 2015.
The IRS also announced the annual benefit limitation under a defined benefit plan will remain unchanged for the second year in a row at $210,000 and the limitation for DC plans also remains unchanged at $53,000.
The definition of a highly compensated employee also remains the same as in 2015 at $120,000.
Also unchanged is the maximum account balance subject to a five-year distribution period for employee stock ownership plans, at $1.07 million.
