The elective deferral limit will increase by $500 from $18,000 to $18,500 in 2018. The increase applies to the combination of both pretax and after-tax “Roth” plans. The limit applies to personal investments and not agency contributions. Regular investments continue year to year unless changed. To take advantage of the higher limit, employees will have to make a new payroll withholding election in 2018.
Catch up contributions are permitted for participants age 50 and older, including those turning 50 during the year. Catch-up contributions are separate from the elective deferral limit and the annual limit imposed on regular employee contributions. The maximum catch up limit will remain unchanged at $6,000.Additional TSP information can be found at www.TSP.gov.
Flexible Spending Account Increases Its Dollar Amount
The Internal Revenue Service (IRS) has announced an increase of $50 from $2,600 to $2,650 for the annual employee pre-tax contributions allowed under both the Health Care Flexible Spending Account (HCFSA) and Limited Expense Health Flexible Spending Account (LEXFSA). This change does not apply to the annual maximum for Dependent Care Flexible Spending Accounts, which remains at $5,000. The increase for the HCFSA and LEXFSA is effective for plans beginning on or after January 1, 2018.
Unfortunately, Open Season materials and brochures reflect the current limit of $2,600 and cannot be updated. If there are any questions, the updated limits are currently posted on the website,www.FSAFEDS.com.
Tips for 2018