IRS announces new retirement plan limitations for 2020

IRS announces new retirement plan limitations for 2020

On November 6, 2019, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2020 tax year. Changes to the limits are based on the Social Security cost-of-living increases. Similar to last year, most of the applicable pension and retirement limitations will increase for the 2020 tax year.  

Below are the new 2020 plan limitations:

  2020  2019
401(k),403(b) and 457(b) deferral limits     $19,500  $19,000
401(k) and 403(b) catch-up deferral limits     $6,500 $6,000
Annual limitation on compensation  $285,000 $280,000
Defined contribution limitation     $57,000 $56,000
Defined benefit limitation  $230,000 $225,000
Highly compensated employee compensation threshold       $130,000 $125,000
Key employee compensation - officer threshold  $185,000 $180,000
SIMPLE deduction $13,500     $13,000
SIMPLE catch-up contribution  $3,000 $3,000
IRA contribution limit   $6,000  $6,000
IRA catch-up contribution limit  $1,000  $1,000
Social Security wage base  $137,700  $132,900

 

For more information or if you have questions, please contact one of the attorneys listed below.

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