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2013 Employee Benefit Limits

November 5, 2012

Overview

The Internal Revenue Service and Social Security Administration have announced increases in various retirement plan benefits and employment tax limits for 2013. These adjustments are made to reflect price and wage inflation, or to implement other increases dictated by law. The limits for 2013, as compared to those in effect for the current year, are set forth below.

RETIREMENT PLAN LIMITS

 

2012

2013

Limits on Benefits and Contributions:

401(k) & 403(b) plans, elective deferral limit

457(b) plan, total contribution limit

Age 50 catch-up contribution limit

Defined contribution plan, total contribution limit

Defined benefit plan, annual accrual limit

 

$17,000

$17,000

$5,500

$50,000

$200,000

 

$17,500

$17,500

$5,500

$51,000

$205,000

"Highly Compensated Employee" status applied to following year (e.g., if an employee earns $115,000 in 2012, the employee is an HCE for 2013)

$115,000

$115,000

Annual Compensation Limit

$250,000

$255,000

"Key Employee" officer status

$165,000

$165,000

SIMPLE plans:

Elective deferral limit

Catch-up contribution limit

 

$11,500

$2,500

 

$12,000

$2,500

SOCIAL SECURITY LIMITS

 

2012

2013

Payroll Taxes:

FICA wage base

FICA OASDI tax rate

Employee's Tax*

Employer's Tax

Medicare tax rate

Up to $200,000 in wages

Wages in excess of $200,000 (Employer Tax)

Wages in excess of $200,000 (Employee Tax)**

 

$110,100

 

4.2%

6.2%

 

1.45%

1.45%

1.45%

 

$113,700

 

6.2%

6.2%

 

1.45%

1.45%

2.35%

Earnings Test Thresholds:

Before normal retirement age

Year of normal retirement age

 

$14,160

$38,880

 

$15,120

$40,080

Maximum Monthly Benefit

$2,513

$2,533

*The Temporary Payroll Tax Cut Continuation Act of 2011 reduced the Social Security payroll tax rate by 2% on the portion of the tax paid by the worker through the end of February 2012. The Middle Class Tax Relief and Job Creation Act of 2012 extended the reduction through the end of 2012. This temporary reduction expires at the end of December 2012.
** The Affordable Care Act increased the Medicare tax for higher paid employees by 0.9%

HEALTH SAVINGS ACCOUNTS

 

2012

2013

Annual HSA Contribution Deduction Limit

Self-only coverage

Family coverage

Catch-up contribution

 

$3,100

$6,250

$1,000

 

$3,250

$6,450

$1,000

Out-of-Pocket Spending Limit

Self-only coverage

Family coverage

 

$6,050

$12,100

 

$6,250

$12,500

Minimum Required Deductible

Self-only coverage

Family coverage

 

$1,200

$2,400

 

$1,250

$2,500

Professionals

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