New empty SBT Project fails with Unsupported major.minor version 52 stack trace

I have IntelliJ Ultimate Edition 2016.2.5 on a Macbook. I have the Scala plugin v2016.2.1 installed. When I create a new Scala project using SBT as the build tool, I accept the defaults of Scala version 2.12.1, JDK 1.8.0_60, and SBT 0.13.8. But then the new empty project won't build. It gives the following stack trace:

Error:scalac: Error: scala/tools/nsc/Main : Unsupported major.minor version 52.0
java.lang.UnsupportedClassVersionError: scala/tools/nsc/Main : Unsupported major.minor version 52.0
at java.lang.ClassLoader.defineClass1(Native Method)
at java.lang.ClassLoader.defineClass(ClassLoader.java:800)
at java.security.SecureClassLoader.defineClass(SecureClassLoader.java:142)
at java.net.URLClassLoader.defineClass(URLClassLoader.java:449)
at java.net.URLClassLoader.access$100(URLClassLoader.java:71)
at java.net.URLClassLoader$1.run(URLClassLoader.java:361)
at java.net.URLClassLoader$1.run(URLClassLoader.java:355)
at java.security.AccessController.doPrivileged(Native Method)
at java.net.URLClassLoader.findClass(URLClassLoader.java:354)
at java.lang.ClassLoader.loadClass(ClassLoader.java:425)
at java.lang.ClassLoader.loadClass(ClassLoader.java:358)
at java.lang.Class.forName0(Native Method)
at java.lang.Class.forName(Class.java:270)
at sbt.compiler.RawCompiler.apply(RawCompiler.scala:24)
at sbt.compiler.AnalyzingCompiler$$anonfun$compileSources$1$$anonfun$apply$2.apply(AnalyzingCompiler.scala:146)
at sbt.compiler.AnalyzingCompiler$$anonfun$compileSources$1$$anonfun$apply$2.apply(AnalyzingCompiler.scala:142)
at sbt.IO$.withTemporaryDirectory(IO.scala:291)
at sbt.compiler.AnalyzingCompiler$$anonfun$compileSources$1.apply(AnalyzingCompiler.scala:142)
at sbt.compiler.AnalyzingCompiler$$anonfun$compileSources$1.apply(AnalyzingCompiler.scala:139)
at sbt.IO$.withTemporaryDirectory(IO.scala:291)
at sbt.compiler.AnalyzingCompiler$.compileSources(AnalyzingCompiler.scala:139)
at sbt.compiler.IC$.compileInterfaceJar(IncrementalCompiler.scala:52)
at org.jetbrains.jps.incremental.scala.local.CompilerFactoryImpl$.org$jetbrains$jps$incremental$scala$local$CompilerFactoryImpl$$getOrCompileInterfaceJar(CompilerFactoryImpl.scala:93)
at org.jetbrains.jps.incremental.scala.local.CompilerFactoryImpl$$anonfun$getScalac$1.apply(CompilerFactoryImpl.scala:50)
at org.jetbrains.jps.incremental.scala.local.CompilerFactoryImpl$$anonfun$getScalac$1.apply(CompilerFactoryImpl.scala:49)
at scala.Option.map(Option.scala:146)
at org.jetbrains.jps.incremental.scala.local.CompilerFactoryImpl.getScalac(CompilerFactoryImpl.scala:49)
at org.jetbrains.jps.incremental.scala.local.CompilerFactoryImpl.createCompiler(CompilerFactoryImpl.scala:22)
at org.jetbrains.jps.incremental.scala.local.CachingFactory$$anonfun$createCompiler$1.apply(CachingFactory.scala:24)
at org.jetbrains.jps.incremental.scala.local.CachingFactory$$anonfun$createCompiler$1.apply(CachingFactory.scala:24)
at org.jetbrains.jps.incremental.scala.local.Cache$$anonfun$getOrUpdate$2.apply(Cache.scala:20)
at scala.Option.getOrElse(Option.scala:121)
at org.jetbrains.jps.incremental.scala.local.Cache.getOrUpdate(Cache.scala:19)
at org.jetbrains.jps.incremental.scala.local.CachingFactory.createCompiler(CachingFactory.scala:23)
at org.jetbrains.jps.incremental.scala.local.LocalServer.compile(LocalServer.scala:22)
at org.jetbrains.jps.incremental.scala.remote.Main$.make(Main.scala:67)
at org.jetbrains.jps.incremental.scala.remote.Main$.nailMain(Main.scala:24)
at org.jetbrains.jps.incremental.scala.remote.Main.nailMain(Main.scala)
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:57)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
at java.lang.reflect.Method.invoke(Method.java:606)
at com.martiansoftware.nailgun.NGSession.run(NGSession.java:319)

I figured that somewhere I had a setting pointing at JDK 7, and everything I have read would indicate that's the issue. But I cannot find anything like that. My project and module settings are all set to 1.8.

Anyone have any other ideas?