2017 401(k) Contribution Limit
For 2017, the 401(k) Contribution Limit is $18,000 (Elective deferral) and +$6,000 (Age 50 catch-up).
Effective 2017-01-01Source: Notice 2016-62 (IRS)Verified 2026-09-01
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Elective deferral | $18,000 | $18,000 | +$0 (+0.0%) |
| Age 50 catch-up | +$6,000 | +$6,000 | +$0 (+0.0%) |
Who it applies to
Employees who participate in an applicable employer plan under Internal Revenue Code Section 401(k), including those aged 50 or older who are eligible for catch-up contributions.
What changed this year, and why
Effective January 1, 2017, the elective deferral limit under Internal Revenue Code Section 401(k) remains $18,000 and the catch-up contribution limit for participants aged 50 or older remains $6,000.
Common questions
- How much can I defer into my employer retirement plan in 2017?
- The elective deferral limit is $18,000 for 2017. Participants aged 50 or older may make an additional catch-up contribution of $6,000.
- Did the limit change for 2017?
- Both the $18,000 elective deferral limit and the $6,000 catch-up limit for participants aged 50 or older remained unchanged for 2017.
What the limit counts, and the tax it does not save
An elective deferral is the amount you choose to have your employer contribute to a qualified retirement plan instead of paying to you directly. This deferral is treated as an employer contribution for plan purposes. For tax purposes, most elective deferrals are not included in your wages subject to income tax when they are contributed, which reduces your current income tax. However, the deferral is still included in wages subject to social security and Medicare taxes, so it does not reduce those payroll taxes. Designated Roth contributions are different: they are included in your taxable wages when made. Elective deferrals can go to several types of plans, including cash or deferred arrangements, the Thrift Savings Plan for federal employees, SARSEPs, SIMPLE plans, tax-sheltered annuity plans, and certain other qualified plans. The $18,000 limit for 2017 applies to the total of all your elective deferrals across every such plan in which you participate during the year.
The amount you set aside (called an elec- tive deferral) is treated as an employer contribu- tion to a qualified plan. An elective deferral, other than a designated Roth contribution (dis- cussed later), isn't included in wages subject to income tax at the time contributed. However, it is included in wages subject to social security and Medicare taxes.
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
One limit across every plan you defer into
The $18,000 limit applies to the total of all elective deferrals you make across every plan during 2017, not to each plan individually. Your employer or plan administrator applies the proper annual limit when processing your contributions, but you are responsible for monitoring the total amount you defer to ensure it does not exceed the overall limit. If you participate in more than one plan that accepts elective deferrals, you must add together all contributions made on your behalf. Amounts deferred under specific plan limits, such as those that apply to SIMPLE plans or tax-sheltered annuity plans, still count toward this overall ceiling. The overall limit reduces the room available in other plans when you defer under a plan-specific limit.
Overall limit on deferrals. For 2017, in most cases, you shouldn't have deferred more than a total of $18,000 of contributions to the plans lis- ted in (1) through (3), earlier. The specific plan limits for the plans listed in (4) through (7), ear- lier, are discussed later. Amounts deferred un- der specific plan limits are part of the overall limit on deferrals.
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
The catch-up once you are old enough for it
If you reach age 50 by the end of your tax year, you may be allowed to make catch-up contributions, which are additional elective deferrals beyond the regular $18,000 limit. For 2017, the catch-up amount is $6,000, giving eligible participants the ability to defer an extra $6,000 on top of the standard limit. Catch-up contributions apply to certain types of plans, including tax-sheltered annuity plans, SARSEPs, SIMPLE plans, and governmental section 457 plans. Each plan type has its own rules about how catch-up contributions work and whether other limits or restrictions apply. You must reach age 50 by the end of the tax year to qualify for the catch-up provision for that year. The catch-up amount is separate from the regular elective deferral limit and does not reduce the amount you can defer under the overall limit.
Catch-up contributions. You may be allowed catch-up contributions (additional elective de- ferrals) if you are age 50 or older by the end of your tax year.
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
What happens if you defer more than the limit
If your elective deferrals exceed the annual limit, you must notify your plan by the date the plan requires. If the plan permits, the excess amount will be distributed to you. When you participate in more than one plan, you can have the excess paid out from any plan that allows these distributions, but you must notify each plan by its required deadline of the amount to be paid from that particular plan. The plan must pay you the excess amount plus any income earned on it by April 18 of the following year. You must include the excess deferral in your income for the year you made the deferral, unless it was a designated Roth contribution. If you do not withdraw the excess by the deadline, you face double taxation: the excess is taxed once when contributed and again when eventually distributed from the plan.
Excess deferrals. If your deferrals exceed the limit, you must notify your plan by the date re- quired by the plan. If the plan permits, the ex- cess amount will be distributed to you.
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
Roth deferrals count against the same limit
When you participate in a 401(k) plan, you may elect to designate some or all of your elective deferrals as Roth contributions. These designated Roth contributions are treated as elective deferrals for purposes of the annual limit, except that they are included in your current-year taxable income. This means they count toward the same $18,000 cap that applies to your traditional pre-tax deferrals. The Roth option affects the timing of when you pay tax on the contributions, not the total amount you are allowed to defer. If you are age 50 or older by the end of the year, you may contribute an additional $6,000 in catch-up contributions on top of the $18,000 base, and those catch-up dollars can also be split between Roth and pre-tax forms. Your combined total of all elective deferrals, whether Roth or traditional, cannot exceed the applicable limit. Your plan must maintain separate accounts to track Roth and pre-tax balances, and Roth deferrals are reported using specific codes on your Form W-2.
Designated Roth contributions are treated as elective deferrals, except that they are included in income.
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Notice 2016-62 (IRS)
- Elective deferral
The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) remains unchanged at $18,000.
- Age 50 catch-up
The dollar limitation under § 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in § 401(k)(11) or § 408(p) for individuals aged 50 or over remains unchanged at $6,000.