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Retirement Plan Limits

2018 Retirement Plan Limits

Individual Limits
401(k) Employee Contributions$18,500
401(k) Employee Catch Up
for employees age 50 or older
Additional $6,000
Profit Sharing Plan100%* of pay up to $55,000
Money Purchase Plan100%* of pay up to $55,000
Annual Additions Limit
Includes Employee, employer and forfeitures;
Does Not Include Catch Up Contribution
100%* of pay up to $55,000
*Not to Exceed Employer Plan Limits


Employer Plan Limits
Profit Sharing Plan25% of Eligible Payroll**
Money Purchase Plan25% of Eligible Payroll**
** SECA Adjustment Required for Sole Proprietors


Participant Loan Limits
If Plan Language Allows, Participant May Borrow50% of Vested Account balance up to $50,000
Repayment RequirementsAmortized Principle and Interest, at least quarterly payments
Reasonable Interest Rate
Not to Exceed 5 years (except for purchase of principal residence)


Keys & Highly Compensated Employees
Key Employees: Used to Determine Top-heavy Status.
A plan is Top Heavy if 60% or more of assets belong to Key Employees
During current plan year:
  1. Officer and earning > $175,000 (indexed)
  2. > 5% Owner; or
  3. >1% owner and earning
    > $150,000
Highly Compensated: Used for Discrimination Testing
  1. >5% owner in the current or preceding year, or
  2. Compensation >$120,000 in 2017 for 2018 testing


Indexed Limits & History2018 201720162015
401(k) Employee Contributions$18,500$18,000$18,000$18,000
401(k) Catch Up Contributions$6,000$6,000$6,000$6,000
Defined Contribution Plan$55,000$54,000$53,000$53,000
Defined Benefit Limit$220,000$215,000$210,000$210,000
Compensation$275,000$270,000$265,000$265,000
FICA Taxable Wage Base$128,700$127,200$118,500$118,500


Due Dates & Penalties
Plan Establishment Due DateBy Fiscal Year End
Plan Contribution Due DateEmployer contributions: Tax filing date plus extensions, not to exceed 8 months after the plan year end.
Employee contributions: It is recommended that deposits be made within 7 days of withholding from employee pay.
Forms 5500 Due Date7 months after the plan year end (plus 2 month extension)
Failure to File Form 5500IRS $25 per day up to $15,000; DOL Up to $1,000 per day
Premature Distribution10% Excise Tax if under age 59 1/2
Excess Contribution10% Excise Tax