2021 Retirement Plan Limits

Kilpatrick Townsend & Stockton LLP
Contact

 2021 Retirement Plan Limits

 

2020

2021

Maximum Elective Deferrals to §401(k), §403(b), and §457(b) Plans

$19,500

$19,500

Maximum Catch-up Elective Deferrals to Plans other than SIMPLE Plans (age 50 by the end of the year)

$6,500

$6,500

Section 415 Limits

-    Defined Contribution Plan Annual Addition Maximum

-    Defined Benefit Plan Dollar Maximum

 

$57,000

$230,000

 

$58,000*

$230,000

 

Annual Compensation Limit under §§401(a)(17), 404(l) and 408(k)

$285,000

$290,000*

§414(q) Highly Compensated Employee definition

$130,000

$130,000

§416(i) Top-Heavy Compensation – Used to determine officers as key employees

$185,000

$185,000

§409(o) Maximum ESOP Account Balance Subject to 5-Year Distribution Period

$1,150,000

$1,165,000*

ESOP Amount Used to Determine Extensions of the 5-Year Distribution Period

$230,000

$230,000

§408A Maximum Roth IRA Contribution (AGI Limit)
   Married Filing Joint Return or Qualifying Widower
   All other Taxpayers (other than married filing separately)

$196,000

$124,000

$198,000*

$125,000*

*Increased Amount for 2021

 
Social Security Tax and Wage Base

On October 13, 2020, the Social Security Administration announced that the 2021 social security taxable wage base will be $142,800, which is an increase of $5,100 from $137,700 for the 2020 calendar year. 

Medicare Tax

The regular Medicare tax rate of 1.45% remains unchanged and applies to all income without a limitation for both the employee and employer portion. The Affordable Care Act additional Medicare tax of 0.9% remains unchanged. The additional Medicare tax applies to wages, other compensation, and self-employment income over certain dollar thresholds ($200,000 for single and $250,000 for married filing jointly). The additional Medicare tax only applies to the employee and not the employer. IRS regulations require an employer to withhold the additional Medicare tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Kilpatrick Townsend & Stockton LLP | Attorney Advertising

Written by:

Kilpatrick Townsend & Stockton LLP
Contact
more
less

Kilpatrick Townsend & Stockton LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.