Payroll by the Numbers: Key Tax-Related Amounts for New Year

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By Keith M. Hill

Most of the tax-related amounts that payroll professionals are to work with in 2017 were made available by the Internal Revenue Service and other federal agencies. Many numbers did not change from 2016, but the biggest adjustment occurred with the Social Security wage base amount, which increased by $8,700.

This guide serves as a reminder for payroll departments of some of the required amounts for 2017.

Threshold Amounts

These figures represent amounts that are to be used in the new year.

•$127,200—the 2017 wage base for the Social Security program, also known as the Old-Age, Survivors and Disability Insurance program, up 7.3 percent from $118,500 in 2016.

•$18,000—the limit for tax-deferred employee contributions to a Section 401(k) plan, Section 403(b) plan or Section 457 plan for 2017.

•$6,000—the catch-up contribution limit to a Section 401(k) plan for individuals 50 and older for 2017.

•$54,000—the annual contribution limit for defined-contribution plans in 2017, provided the annual compensation taken into consideration is no more than $270,000.

•$12,500—the maximum elective deferral an employee may contribute in 2017 to a savings incentive match plan for employees (SIMPLE plan). Employees 50 and older may contribute up to $15,500.

•$600—the participation threshold for a simplified employee pension under Internal Revenue Code Section 408(k)(2)(C) in 2017.

•$215,000—the annual benefit limit for defined-benefit plans for 2017.

•$400,000—the Section 401(a)(17) cost-of-living adjustment to the compensation limit for 2017.

•$120,000—the limitation used in the definition of a highly compensated employee under Section 414(q)(1)(B) for 2017.

•$175,000— the dollar limitation for a key employee in a top-heavy plan in 2017.

•$105,000—the amount of compensation used to identify a control employee for use in valuing fringe benefits in 2017.

• $15,900—the minimum fair-market value amount for cars available for personal use by employees; $17,800, the minimum value for trucks and vans; $21,100, the car fleet value; $23,300, the truck fleet value.

Other Payroll Numbers

2017 per diem rates: The standard per diem rate is $142 ($91 lodging, $51 meals and incidental expenses) to reflect the average daily rate for lodging and meals and incidentals. High-low per diem rates for 2017 also have been released.

•$255—the maximum monthly amount that an employer may provide on a tax-free basis for transit passes or qualified van pools or both. The employer-provided parking exclusion remains at $255 a month. Employers may reimburse employees who commute by bicycle up to $20 a month in expenses tax free. Note: A bike-share program is not considered a qualified transportation fringe benefit under tax code Section 132(a)(5).

•$102,100—the maximum amount of foreign-earned income that a U.S. citizen or resident living and working abroad may exclude for tax purposes in 2017, provided the individual qualifies under Internal Revenue Code Section 911 requirements.

•$2,600—the tax-free amount for qualified health flexible spending arrangements in 2017, up from $2,550 in 2016.

•$3,400—the maximum amount of tax-free contributions for covered benefits allowed for individual health savings accounts, up from $3,350 in 2016. For family HSAs, the amount remains $6,750.

•$2,000—the maximum amount a domestic employee in a private home may be paid in a year that is exempt from FICA taxes in 2017.

• $500,000—Maximum penalty in 2017 for filing incorrect information returns with the IRS and correcting them within 30 days.

•$1,894—the maximum amount per employee that an employer may be charged for repeated or willful violations of the minimum wage and overtime requirements of the Fair Labor Standards Act. The penalty for violations of the child labor provisions of the law is a maximum of $12,080 per employee.

•$13,570—the credit allowed for expenses related to adoption assistance.

•39.6 percent—the highest marginal tax rate will affect singles whose income exceeds $418,400 in 2017, up from $415,050 in 2016. For married taxpayers filing a joint return, the threshold amount will be $470,700, up from $466,950.

Phone Numbers

•800-829-4933—the toll-free number established by the Internal Revenue Service to help businesses with questions on employment taxes.

•866-455-7438—the toll-free number for the IRS Information Reporting Program.

•800-772-6270—the toll-free number for the Social Security Administration.

•202-693-0067—the number for the Labor Department's Fair Labor Standards Act team on wage and hour issues.

•800-372-1033—the toll-free Bloomberg BNA customer service number.

Toward 2017: Bloomberg BNA's Year-End Clearinghouse is available on the Payroll Library website, which offers additional information.

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