2017 457(b) Contribution Limit
The 2017 457(b) Contribution Limit is $18,000.
Effective 2017-01-01Source: Notice 2016-62 (IRS)Verified 2026-08-29
Compared with 2016
Every figure on this page is unchanged from 2016.
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Deferral limit | $18,000 | $18,000 | +$0 (+0.0%) |
Who it applies to
Participants in Section 457(b) deferred compensation plans sponsored by state and local governments or tax-exempt organizations
What changed this year, and why
The elective deferral limit for deferred compensation plans of state and local governments and tax-exempt organizations under Section 457(e)(15) remained $18,000 for 2017, unchanged from the prior year.
Common questions
- What is the Section 457(b) deferral limit for 2017?
- For 2017, the limit on elective deferrals under Section 457(b) is $18,000.
- Is there a catch-up contribution provision for Section 457(b) plans?
- Yes. Section 457 allows a special catch-up in the three years before a participant reaches normal retirement age, but total deferrals in any year cannot exceed the annual limit of $18,000 under the standard provision.
Your limit is the lesser of the dollar cap and your includible compensation
For 2017, the basic elective deferral limit under a section 457 plan is $18,000. However, the dollar cap is only part of the rule. A participant's deferrals for the year cannot exceed the lesser of $18,000 or the participant's includible compensation. Includible compensation is generally the pay the participant received from the employer that maintains the 457 plan, including wages, salaries, and professional fees. If a participant earned less than $18,000 from that employer during the year, the deferral limit is reduced to that lower compensation amount rather than the full $18,000. This rule applies to employees of state or local governments and employees of tax-exempt organizations covered by section 457 plans. Amounts deferred above this lesser-of limit are excess deferrals and must be corrected. The $18,000 limit applies to the participant's combined deferrals to all section 457 plans maintained by the same employer, and certain additional catch-up provisions may raise the limit for participants who are near retirement age or age 50 or older.
If you are a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt or- ganizations), you should have deferred no more than the lesser of your includible compensation or $18,000 in 2017.
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
The special catch-up in the last 3 years before normal retirement age
Under a section 457 plan, the basic elective deferral limit for 2017 is $18,000 (the lesser of that amount or includible compensation). However, a special catch-up rule can raise this cap for a participant who is within 3 years of the plan's normal retirement age. For 2017, the catch-up limit is the lesser of $36,000 (twice the basic $18,000 limit) or the basic limit plus the amount of the basic limit that was not used in prior years - but the second alternative is allowed only if the participant is not also using the separate age 50 catch-up contributions described in section 457 rules. The catch-up applies during any or all of the last 3 years ending before the participant reaches the plan's normal retirement age. The plan must explicitly provide for this increased limit; it is not automatic. Participants who are eligible for both the age 50 catch-up and the 3-year pre-retirement catch-up must choose the one that produces the higher deferral limit for the year, because the unused-prior-years alternative of the 3-year catch-up cannot be combined with the age 50 catch-up.
Increased limit. During any, or all, of the last 3 years ending before you reach normal re- tirement age under the plan, your plan may pro- vide that your limit is the lesser of: 1. Twice the annual limit ($36,000 for 2017), or 2. The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions).
Publication 525 (2017), Taxable and Nontaxable Income (IRS)
The age 50 catch-up, and who can use it
For 2017, the basic elective deferral limit under a section 457 plan is $18,000. However, participants who are age 50 or older may be able to defer additional amounts through a special catch-up provision. To qualify for this age 50 catch-up, you must have reached age 50 by the end of the year, and you must be unable to make other elective deferrals to the plan for the year because of limits or restrictions. If you qualify, your deferral limit becomes the basic $18,000 limit plus an additional $6,000. This catch-up is available only for governmental section 457 plans, not for plans maintained by tax-exempt organizations. The age 50 catch-up cannot be combined with the three-year pre-retirement catch-up in the same year. If you are eligible for both catch-up provisions, you can use only the one that gives you the higher deferral limit for that year. The catch-up is designed to help older workers accelerate their retirement savings as they approach normal retirement age.
Catch-up contributions. You generally can have additional elective deferrals made to your governmental section 457 plan if: You reached age 50 by the end of the year, and No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. If you qualify, your limit can be the lesser of your includible compensation or $18,000, plus $6,000.
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)
- Deferral limit
The limitation on deferrals under ยง 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations remains unchanged at $18,000.