SECTION 5. DRAFTING

INFORMATION

The principal authors of this notice are Orla J. O’Connor and Robert A. Martin of the Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this notice, contact Ms. O’Connor at (202) 317-6367 or Mr. Martin at (202) 317-4455 (not tollfree numbers).

6Nothing in this notice may be construed as identifying whether the taxpayer’s treatment of any particular aspect of a transaction described in this notice is a method of accounting.

Bulletin No. 2015–46 667 November 16, 2015

2016 Limitations Adjusted As Provided in Section 415(d), etc.

Notice 2015–75

Section 415 of the Internal Revenue Code (the Code) provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-ofliving increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under § 415. Under § 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under § 215(i)(2)(A) of the Social Security Act.

Cost-of-Living Adjusted Limits for 2016

Effective January 1, 2016, the limitation on the annual benefit under a defined benefit plan under § 415(b)(1)(A) remains unchanged at $210,000.

For a participant who separated from service before January 1, 2016, the participant’s limitation under a defined benefit plan under § 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2015, by 1.0011.

The limitation for defined contribution plans under § 415(c)(1)(A) remains unchanged in 2016 at $53,000.

The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of § 415(b)(1)(A). After taking into account the applicable rounding rules, the amounts for 2016 are as follows:

The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) remains unchanged at $18,000.

The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) remains unchanged at $265,000.

The dollar limitation under § 416(i)(1) (A)(i) concerning the definition of “key

employee” in a top-heavy plan remains unchanged at $170,000.

The dollar amount under § 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5-year distribution period remains unchanged at $1,070,000, while the dollar amount used to determine the lengthening of the 5-year distribution period remains unchanged at $210,000.

The limitation used in the definition of “highly compensated employee” under § 414(q)(1)(B) remains unchanged at $120,000.

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. The dollar limitation under § 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in § 401(k)(11) or 408(p) for individuals aged 50 or over remains unchanged at $3,000.

The annual compensation limitation under § 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost-of-living adjustments to the compensation limitation under the plan under § 401(a)(17) to be taken into account, remains unchanged at $395,000.

The compensation amount under § 408(k)(2)(C) regarding simplified employee pensions (SEPs) remains unchanged at $600.

The limitation under § 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $12,500.

The limitation on deferrals under § 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations remains unchanged at $18,000.

The compensation amounts under § 1.61–21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation purposes remains unchanged at

$105,000. The compensation amount under § 1.61–21(f)(5)(iii) remains unchanged at $215,000.

The Code provides that the $1,000,000,000 threshold used to determine whether a multiemployer plan is a systematically important plan under § 432(e)(9)(H)(v)(III)(aa) is adjusted using the cost-of-living adjustment provided under § 432(e)(9)(H)(v)(III)(bb). After taking the applicable rounding rule into account, the threshold used to determine whether a multiemployer plan is a systematically important plan under § 432(e)(9)(H)(v)(III)(aa) is increased in 2016 from $1,000,000,000 to $1,012,000,000. The Code also provides that several retirement-related amounts are to be adjusted using the cost-of-living adjustment under § 1(f)(3). After taking the applicable rounding rules into account, the amounts for 2016 are as follows:

The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,500 to $37,000; the limitation under § 25B(b)(1)(B) is increased from $39,500 to $40,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $61,000 to $61,500.

The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,375 to $27,750; the limitation under § 25B(b)(1)(B) is increased from $29,625 to $30,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,750 to $46,125.

The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,250 to $18,500; the limitation under § 25B(b)(1)(B) is increased from $19,750 to $20,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,500 to $30,750.

The deductible amount under § 219(b) (5)(A) for an individual making qualified retirement contributions remains unchanged at $5,500.

November 16, 2015 668 Bulletin No. 2015–46

ering exercising their authority under § 4261(e)(3)(C) of the Internal Revenue Code (Code) to prescribe rules to exclude from the tax imposed by § 4261(a) certain amounts attributable to mileage awards (sometimes referred to as “frequent flyer miles”) that are redeemed other than for the taxable transportation of persons by air (referred to in this notice as “other than for taxable air transportation”), such as, but not limited to, redemptions for international air transportation, restaurant gift cards, magazine and newspaper subscriptions, free hotel nights, and items from the airline’s shopping catalog. This notice invites public comments on issues that should be addressed in guidance relating to § 4261(e)(3).