The Internal Revenue Service has announced the 1996 cost-of-living adjustments for limitations affecting employee benefit plans.
The following chart sets forth some of the more significant limitations for 1994, 1995 and 1996, as well as the tax rate and wage base used to compute FICA tax and Social Security benefits for those years, according to the Department of Human Resources Management.
| Employee Benefit Plan Limitations | 1994 | 1995 | 1996 |
| $7,000 limitation on 401(k) elective deferrals | $9,240 | $9,240 | $9,500 |
| Annual limitation on compensation | 150,000 | 150,000 | 150,000 |
| $90,000 limitation on benefits under a defined benefit plan | 118,800 | 120,000 | 120,000 |
| $30,000 limitation on contributions to a defined contribution plan | 30,000 | 30,000 | 30,000 |
| Highly compensated employee limits: | |||
| $75,000 threshold | 99,000 | 100,000 | 100,000 |
| $50,000 threshold | 66,000 | 66,000 | 66,000 |
| $45,000 threshold | 59,400 | 60,000 | 60,000 |
| Threshold for excess distributions: | |||
| $112,500 annual limit | 148,500 | 150,000 | 155,000 |
| $562,500 lump sum limit | 742,500 | 750,000 | 775,000 |
| $300 compensation limit for SEPs | 396 | 400 | 400 |
| Social Security Information | |||
| OASDI tax rate | 6.2% | 6.2% | 6.2% |
| HI tax rate | 1.45% | 1.45% | 1.45% |
| OASDI wage base | $60,600 | $61,200 | $62,700 |
| HI wage base | No limit | No limit | No limit |
This World Wide Web version of MSU Memo was marked up by Chris Brown <brownc@ur.msstate.edu>.
For information about Mississippi State University, contact msuinfo@ur.msstate.edu.
Last modified: Friday, 14-Jun-2002 15:59:27 CDT.
URL: http://msuinfo.ur.msstate.edu/msu_memo/1996/1-16-96/benefit.htm
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