rr-18-04.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

Part I
Section 401. -- Qualified Pension, Profit-Sharing, and Stock Bonus Plans
26 CFR 1.401(l)-1: Permitted disparity in employer-provided contributions or
benefits
Rev. Rul. 2018-04
This revenue ruling provides tables of covered compensation under section
401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations
thereunder, for the 2018 plan year. These tables of covered compensation
reflect a revision to the taxable wage base for 2018 that was announced by
the Social Security Administration on November 27, 2017, and apply in lieu of
the tables that were provided in Revenue Ruling 2017-22, 2017-48 I.R.B. 536,
2017.
Section 401(l)(5)(E)(i) defines covered compensation with respect to an
employee as the average of the contribution and benefit bases in effect under
section 230 of the Social Security Act (the “Act”) for each year in the 35-year
period ending with the year in which the employee attains social security
retirement age.
Section 401(l)(5)(E)(ii) states that the determination for any year preceding the
year in which the employee attains social security retirement age shall be
made by assuming that there is no increase in covered compensation after the
determination year and before the employee attains social security retirement
age.
Section 1.401(l)-1(c)(34) of the Income Tax Regulations defines the taxable
wage base as the contribution and benefit base under section 230 of the Act.
Section 1.401(l)-1(c)(7)(i) defines covered compensation for an employee as the
average (without indexing) of the taxable wage bases in effect for each calendar
year during the 35-year period ending with the last day of the calendar year in
which the employee attains (or will attain) social security retirement age. A
35-year period is used for all individuals regardless of the year of birth of the
individual. In determining an employee's covered compensation for a plan year,
the taxable wage base for all calendar years beginning after the first day of the
plan year is assumed to be the same as the taxable wage base in effect as of the
beginning of the plan year. An employee's covered compensation for a plan year
beginning after the 35-year period applicable under § 1.401(l)-1(c)(7)(i) is the
employee's covered compensation for a plan year during which the 35-year

period ends. An employee's covered compensation for a plan year beginning
before the 35-year period applicable under § 1.401(l)-1(c)(7)(i) is the taxable
wage base in effect as of the beginning of the plan year.

Section 1.401(l)-1(c)(7)(ii) provides that, for purposes of determining the amount
of an employee's covered compensation under § 1.401(l)-1(c)(7)(i), a plan may
use tables, provided by the Commissioner, that are developed by rounding the
actual amounts of covered compensation for different years of birth.
For purposes of determining covered compensation for the 2018 year, the
taxable wage base is $128,400.

The following tables provide covered compensation for 2018.

ATTACHMENT I

2018 COVERED COMPENSATION TABLE

CALENDAR
CALENDAR YEAR OF 2018 COVERED
YEAR OF
SOCIAL SECURITY COMPENSATION
BIRTH
RETIREMENT AGE TABLE II

1907 1972 $ 4,488
1908 1973 4,704
1909 1974 5,004
1910 1975 5,316
1911 1976 5,664
1912 1977 6,060
1913 1978 6,480
1914 1979 7,044
1915 1980 7,692
1916 1981 8,460
1917 1982 9,300
1918 1983 10,236
1919 1984 11,232
1920 1985 12,276
1921 1986 13,368
1922 1987 14,520
1923 1988 15,708
1924 1989 16,968
1925 1990 18,312
1926 1991 19,728
1927 1992 21,192
1928 1993 22,716

ATTACHMENT I

2018 COVERED COMPENSATION TABLE

CALENDAR
CALENDAR YEAR OF 2018 COVERED
YEAR OF
SOCIAL SECURITY COMPENSATION
BIRTH
RETIREMENT AGE TABLE II

1929 1994 24,312
1930 1995 25,920
1931 1996 27,576
1932 1997 29,304
1933 1998 31,128
1934 1999 33,060
1935 2000 35,100
1936 2001 37,212
1937 2002 39,444
1938 2004 43,992
1939 2005 46,344
1940 2006 48,816
1941 2007 51,348
1942 2008 53,952
1943 2009 56,628
1944 2010 59,268
1945 2011 61,884
1946 2012 64,560
1947 2013 67,308
1948 2014 69,996
1949 2015 72,636
1950 2016 75,180
1951 2017 77,880
1952 2018 80,532
1953 2019 83,124
1954 2020 85,656
1955 2022 90,540
1956 2023 92,928
1957 2024 95,220
1958 2025 97,428
1959 2026 99,564
1960 2027 101,652
1961 2028 103,680
1962 2029 105,612
1963 2030 107,532

ATTACHMENT I

2018 COVERED COMPENSATION TABLE

CALENDAR
CALENDAR YEAR OF 2018 COVERED
YEAR OF
SOCIAL SECURITY COMPENSATION
BIRTH
RETIREMENT AGE TABLE II

1964 2031 109,404
1965 2032 111,204
1966 2033 112,920
1967 2034 114,516
1968 2035 116,004
1969 2036 117,384
1970 2037 118,620
1971 2038 119,808
1972 2039 120,960
1973 2040 122,064
1974 2041 123,036
1975 2042 123,924
1976 2043 124,680
1977 2044 125,292
1978 2045 125,904
1979 2046 126,528
1980 2047 127,044
1981 2048 127,464
1982 2049 127,800
1983 2050 128,076
1984 2051 128,364
1985 and Later 2052 and Later 128,400

ATTACHMENT II

2018 ROUNDED COVERED COMPENSATION TABLE

CALENDAR

2018 COVERED
YEAR OF

COMPENSATION
BIRTH

ROUNDED

1937

$ 39,000
1938 – 1939

45,000
1940

48,000

ATTACHMENT II

2018 ROUNDED COVERED COMPENSATION TABLE

CALENDAR

2018 COVERED
YEAR OF

COMPENSATION
BIRTH

ROUNDED

1941

51,000
1942

54,000
1943

57,000
1944

60,000
1945

63,000
1946 – 1947

66,000
1948

69,000
1949

72,000
1950

75,000
1951

78,000
1952

81,000
1953 84,000
1954

87,000
1955

90,000
1956 93,000
1957 – 1958

96,000
1959

99,000
1960

102,000
1961 – 1962 105,000
1963 – 1964

108,000
1965

111,000
1966 – 1967

114,000
1968 – 1969

117,000
1970 – 1972

120,000
1973 – 1975

123,000
1976 – 1980 126,000
1981 and Later 128,400

EFFECT ON OTHER DOCUMENTS
Rev. Rul. 2017-22 is modified and superseded.

DRAFTING INFORMATION
The principal author of this notice is Tom Morgan of the Office of the Associate
Chief Counsel (Tax Exempt and Government Entities). However, other
personnel from the IRS participated in the development of this guidance. For
further information regarding this notice, contact Mr. Morgan at 202-317-6700 or
Michael Spaid at 206-946-3480 (not toll-free numbers).