US employment tax rates and limits for 2014 - …

1 US employment tax rates and limits for 2014 Revised January 2014 ContentsSocial Security wage base to increase for 2014 1 Qualified pension plan limits for 2014 2 Federal mileage rates 3 Fringe-benefit inflation adjustments for 2014 4 Per diem rates under high-low substantiation 5 method for 20142013 FUTA credit reduction states 7 State unemployment insurance 8 wage base limits for 2014 Federal income tax withholding tables 10 for 2014 Supplemental income tax withholding rates 12 for 2014 States with revised income tax withholding 14 tables in 2014 Social Security wage base to increase for 2014 The Social Security wage base will increase from $113,700 to $117,000 in 2014 , higher than the $115,500 projected in the May 2013 Annual Report of The Board of increase in the wage base of $3,300 is estimated to result in higher taxes for about 10 million Medicare tax rate for 2014 remains at of all covered earnings for employers and in 2013.

2 The Additional Medicare Tax of applies to earned income of more than $200,000 ($250,000 for married couples filing jointly). Employers withhold this tax on wages in excess of $200,000 regardless of an employee s filing below for a quick reference Security, Medicare and disability insurance contributions 2014 compared with 2013 Description 20142013 IncreaseSocial Security tax rate for -0-Social Security tax rate for Security wage base$117,000$113,7000$3,300 Maximum Social Security tax for employees$7, $7.

3 $ tax rate for tax rate for employees * -0-Medicare wage base No limit No limit N /A* Employers must withhold an additional Medicare tax of of wages in excess of $200,000. There is no employer matching the complete Social Security Administration fact sheet go related information see our special report employment tax rates and limits for 2014 Preliminary |Qualified pension plan limits for 2014 IRS releases the qualified retirement plan limitations for year 2014 The dollar limitations for qualified retirement and certain nonqualified plans that become effective January 1, 2014 , were released by the IRS (see IR-2013-86 at ).

4 The dollar limitations that are adjusted by reference to IRC 415(d) are adjusted for inflation, and consequently many of the pension plan limitations will change for 2014 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustments. Plan participants in qualified retirement plans will need to consider the impact of the 2014 dollar limitations in their overall financial pretax limit that applies to elective deferrals to 401(k), 403(b) and most 457(b) plans remains at $17,500.

5 The dollar limitation for catch-up contributions for participants age 50 or over also remains unchanged at $5, complete summary of the cost-of-living adjustments applicable to dollar limitations for qualified retirement plans and other items for 2014 is is provided on the retirement plan limitations (2013 vs. 2014 )Description2013 limit2014 limitParticipant pretax contribution limit for 401(k) and 403(b) plansSection 402(g)(1)$17,500$17,500 Deferral limit for deferred compensation plans of state and local governments and tax-exemptsSection 457(e)(15)$17,500$17,500 Dollar limitation for catch-up contributions for participants age 50 or over in 401(k), 403(b), governmental 457 plans and SEPsSection 414(v)(2)(B)(i)

6 $5,500$5,500 Dollar limitation for catch-up contributions for participants age 50 or over to a SIMPLE IRA or a SIMPLE 401(k)Section 414(v)(2)(B)(ii)$2,500$2,500 Defined benefit plan limit1 Section 415(b)(1)(A)Lesser of $205,000 or 100% of the participant s three-year-high compensation Lesser of $210,000 or 100% of the participant s three-year-high compensationDefined contribution plan limitSection 415(c)(1)(A)Lesser of $51,000 or 100% of the participant s compensation Lesser of $52,000 or 100% of the participant s compensationMaximum ESOP account balance is subject to a five-year distribution period/increments for additional yearSection 409(o)(1)(C)(ii)$1,035,000/$205,000$1,05 0,000/$210,000 Highly-compensated-employee dollar thresholdSection 414(q)(1)(B)$115,000$115,000 Definition of key employee in a top-heavy plan officer compensation thresholdSection 416(i)(1)(A)(i)

7 $165,000$170,000 Annual limit on includable compensation for benefits and allocations2 Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii)$255,000$260,000 SEP employee participation floorSection 408(k)(2)(C)$550 $550 SIMPLE retirement accounts contribution limitSection 408(p)(2)(E)$12,000$12,000 Compensation amount of control employees for fringe-benefit valuation purposesTreas. Reg. Section (f)(5)(i) and (iii)$100,000/$205,000$105,000/$210,000 Footnotes1 For a participant who separated from service before January 1, 2014 , the participant s limitation under a defined benefit plan under IRC 415(b)(1)(B)

8 Is computed by multiplying the participant s compensation limitation, as adjusted through 2013, by For eligible participants in certain governmental plans that allow cost-of-living adjustments to the compensation limit to be taken into account, such a limit increases from $380,000 to $385, | US employment tax rates and limits for 2014 PreliminaryFederal 2014 mileage ratesEffective January 1, 2014 , the business standard mileage rate (including vans, pickup trucks and panel trucks) decreases from $ per mile to $ , and the medical and relocation rate also decreases from $ per mile to $ Mileage related to charity is set by law and remains at $ per mile.

9 (IRS Notice 2013-80.)Note that the business standard mileage rate may not be used (1) after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS), (2) after claiming an IRC 179 deduction for that vehicle, or (3) for more than four vehicles used simultaneously. (Rev. Proc. 2010-51)Summary of mileage rates 2013 compared with 2014 Type of mileage Effective January 1, 2013 Effective January 1, 2014 Business standard $ $ $ $ and medical $ $ employment tax rates and limits for 2014 Preliminary |Fringe-benefit inflation adjustments for 2014In Revenue Procedure 2013-35, the IRS published the inflation adjustments that will apply to various fringe benefits in medical savings account (MSA)

10 LimitsSummarized below are the 2014 limits that apply to Self-only coverage Family coverageAnnual deductible as defined in IRC 220(c)(2)(A)Not less than $2,200 and not more than $3,250 Not less than $4,350 and not more than $6,550 Annual out-of-pocket (other than for premiums)Not to exceed $4,350 Not to exceed $8,000 Adoption assistanceThe limit on qualified adoption assistance for 2014 is $13,190, up from $12,970 in flexible spending accountsThe 2014 annual limit on the amount of pretax contributions employees can make toward their health flexible spending account under a cafeteria plan is $2,500, unchanged from fringe benefitsThe 2014 monthly limit on parking benefits is $250.