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Compliance February 8, 2017
IRS Issues Covered Compensation Tables for 2017
A revenue ruling reveals compensation tables for use in determining contributions to defined benefit plans as well as the taxable wage based used in permitted disparity contribution formulas for DC plans.
Reported by Rebecca Moore
The Internal Revenue Service (IRS) has issued Revenue Ruling 2017-05, revealing the taxable wage base for permitted disparity formulas used in defined contribution (DC) plans.
Permitted disparity formulas allow for larger contributions or benefits with respect to compensation in excess of the Social Security wage base. For purposes of determining covered compensation for the 2017 year, the taxable wage base is $127,200.
In determining an employee’s covered compensation for a plan year, the taxable wage base for the plan year is the taxable wage base in effect as of the beginning of the period.
The ruling also provides tables of covered compensation for determining contributions to qualified pension, profit-sharing, and stock bonus plans.
Text of Revenue Ruling 2017-5 is here.« IRS Provides Information on Types of Advice Available to Plan Sponsors