[co-author: Julie Wagner]
The Internal Revenue Service released the cost-of-living adjusted qualified retirement plan limitations effective January 1, 2020. For ease of reference and comparison to prior years, we have placed the adjusted limitations in the table below. For more information, refer to the Internal Revenue Service’s news release and Notice 2019-59 and to the Social Security Administration’s October 10, 2019, fact sheet.
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|
Qualified Plan Limits
|
| Type of Limitation |
2020 |
2019 |
2018 |
2017 |
2016 |
| Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) |
$19,500 |
$19,000 |
$18,500 |
$18,000 |
$18,000 |
| Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) |
$6,500 |
$6,000 |
$6,000 |
$6,000 |
$6,000 |
| SIMPLE Salary Deferral |
$13,500 |
$13,000 |
$12,500 |
$12,500 |
$12,500 |
| SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals |
$3,000 |
$3,000 |
$3,000 |
$3,000 |
$3,000 |
| 415 limit for Defined Benefit Plans |
$230,000 |
$225,000 |
$220,000 |
$215,000 |
$210,000 |
| 415 limit for Defined Contribution Plans |
$57,000 |
$56,000 |
$55,000 |
$54,000 |
$53,000 |
| Annual Compensation Limit |
$285,000 |
$280,000 |
$275,000 |
$270,000 |
$265,000 |
| Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 |
$425,000
|
$415,000
|
$405,000
|
$400,000
|
$395,000
|
| Highly Compensated Employee 414(q)(1)(B) |
$130,000 |
$125,000 |
$120,000 |
$120,000 |
$120,000 |
| Key employee in top heavy plan (officer) |
$185,000 |
$180,000 |
$175,000 |
$175,000 |
$170,000 |
| Tax Credit ESOP Maximum balance |
$1,150,000 |
$1,130,000 |
$1,105,000 |
$1,080,000 |
$1,070,000 |
| Amount for Lengthening of 5-Year ESOP Period |
$230,000 |
$225,000 |
$220,000 |
$215,000 |
$210,000 |
| Taxable Wage Base |
$137,700 |
$132,900 |
$128,400 |
$127,200 |
$118,500 |
| IRAs for individuals 49 and below |
$6,000 |
$6,000 |
$5,500 |
$5,500 |
$5,500 |
| IRAs for individuals 50 and above |
$7,000 |
$7,000 |
$6,500 |
$6,500 |
$6,500 |
| FICA Tax for employees and employers |
7.65% |
7.65% |
7.65% |
7.65% |
7.65% |
| Social Security Tax for employees and employers |
6.2% |
6.2% |
6.2% |
6.2% |
6.2% |
| Medicare Tax for employers and employees |
1.45% |
1.45% |
1.45% |
1.45% |
1.45% |
| Additional Medicare Tax for single or head of household* |
.9% of comp
>$200,000 |
.9% of comp
>$200,000 |
.9% of comp
>$200,000 |
.9% of comp
>$200,000 |
.9% of comp
>$200,000 |
| Additional Medicare Tax for married filing jointly filing status* |
.9% of comp
>$250,000 |
.9% of comp
>$250,000 |
.9% of comp
>$250,000 |
.9% of comp
>$250,000 |
.9% of comp
>$250,000 |
| *For taxable years beginning after 12/31/12, an employer must withhold Additional Medicare Tax on wages or compensation paid to an employee in excess of $200,000 in a calendar year for single/head of household filing status ($250,000 for married filing jointly). |
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