IRS Announces Benefit Plan Adjustments for 2014

The following limits have  been announced by the IRS for the year 2014:

  • 401(k) elective limits stay the same for 2014 – $17,500
  • Catch-up deferrals for those 50 or older remain the same – $5,500
  • Considered compensation limit moves up to $260,000 (previously $255,000)
  • Simple IRA deferrals also stay the same for 2014 – $12,000
  • Social Security Wage Base increases to $117,000 (previously $113,700)

The IRS also modified the “use-or-lose” rule for health flexible spending arrangements in order to allow, at the plan sponsor’s option, participating employees to carry over up to $500 of unused amounts remaining at year-end rather than having to forfeit all the unused amounts.  To utilize this option , your plan must be amended and this can still be done for 2013