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2016 Federal and State Rates/Limits

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Question
What are the changes in rates and limits for 2016?

Answer

Type 2016

Rate

Wage Base Limit 2016

Max Paid (ER)

Max Withheld (EE)

OASDI

(remains the same)

EE/ER 6.2%

$118,500

$7347.00

$7347.00

Medicare

Wages over

$200,000

EE/ER 1.45%

EE Only Additional 0.9%

 

No Limit

 

No Limit

 

No Limit

FUTA

(for Credit Reduction States)

0.6%

$7,000.00

$42.00/per EE

NA

UI (IL)

0.550% - 7.75%

New Business
3.55%

 

$12,960.00

 

Varies

 

NA

UI (IL)

 

Small Business 5.4%

An employer whose contribution rate is 5.4% or higher and whose total quarterly wages are less than $50,000 pays contributions at 5.4% in that quarter.

Every new employing unit must register with IDES within 30 days of start-up. "Report to Determine Liability Under the Illinois Unemployment Insurance Act".

Register electronically through the Illinois TaxNet website.

IRS2016

Standard Mileage Rate

56cents permile

For Business MilesDriven

(23.5 cents per mile driven for medial or moving purposes)

(14 cents per mile driven in service of charitableorganizations)

Supplemental wage payments $1,000,000

 

39.6%

Excess is subject to withholding at this percentage without regard to the employee’s Form W-4 status designation and exemptions

2016 Federal Tax Supplemental Rate

25%

 

401K

 

$18,000

+ $6,000 Catchup (age 50 +only)

Total ER and EE contributions to all of an employer’s plans are subject to an overall annual limitation the lesser of:

-100 percent of the employee’s compensation, or

-$53,000 in2016

IRA

 

$5,500

+ $1,000 CatchUp

 

SIMPLE

 

$12,500

+ $3,000 Catchup (age 50 +only)

ER contributions to a SIMPLE 401(k) plan are limited to either:

-A dollar-for-dollar matching contribution, up to 3% of pay;

or

-A non-elective contribution of 2% of pay for each eligible employee.

No other ER contributions can be made to a SIMPLE 401(k) plan, and EE’s cannot participate in any other retirement plan of the employer.

HSA

Per Employee

$3350+
$1000 CatchUp

$6750+
$1000 CatchUp

 

FSA

 

$2,550

 

Maximum

Compensation

 

$265,000

The maximum of an employees’ wage that may be considered for the calculation of a participants’ retirement benefit amount.

HCE Threshold

 

$120,000

Considered highly compensated employee for the purpose of401K non-discrimination testing

 


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Views: 549 Created on: Dec 02, 2015
Date updated: Dec 02, 2015

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