IRS Announces 2020 Plan Contribution and Benefit Limits

The Internal Revenue Service announced cost-of-living adjustments (COLAs) affecting dollar limitations for pension plans and other retirement-related items for the 2020 tax year. See the chart below for further details.
The highlights of limitations that changed from 2019 to 2020 include the following:
  • The 415(c) contribution limit applicable to defined contribution retirement plans increased from $56,000 to $57,000.
  • The 401(a)(17) annual compensation limit applicable to retirement plans increased from $280,000 to $285,000.
  • The elective deferral limit increased to $19,500.
     
See the chart below for further details for the new 2020 limits, as well as those for recent tax years.
 
2020
2019
2018
2017
Retirement Plans        
Annual Compensation Limits - 401(a)(17)/404(l)
285,000
280,000
275,000
270,000
Elective Deferrals 401(k)/403(b) - 402(g)(1)
19,500
19,000
18,500
18,000
Catch-up Contributions - 414(v)(2)(B)(i)
6,500
6,000
6,000
6,000
457 Elective Deferrals - 457(e)(15)
19,500
19,000
18,500
18,000
Defined Contribution Limits - 415(c)(1)(A)
57,000
56,000
55,000
54,000
Annual Compensation Grandfathered Governmental Plans
425,000
415,000
405,000
400,000
Other        
Highly Compensated Employee Threshold - 414(q)(1)(B) 130,000
125,000
120,000
120,000
Defined Benefit Limits - 415(b)(1)(A) 230,000
225,000
220,000
215,000
Key Employee - 416(i)(1)(A)(i) 185,000
180,000
175,000
175,000
Social Security Taxable Wage Base 137,700
132,900
128,400
127,200
IRAs        
IRA Contribution Limit - 219(b)(5)(A)
6,000
6,000
5,500
5,500
IRA Catch-Up Contributions - 219(b)(5)(B)
1,000
1,000
1,000
1,000
SEP        
SEP Minimum Compensation - 408(k)(2)(C)
600
600
600
600
SEP Maximum Compensation - 408(k)(3)(C)
285,000
280,000
275,000
270,000
SIMPLE Plans        
SIMPLE Maximum Contributions - 408(p)(2)(E)
13,500
13,000
12,500
12,500
SIMPLE Catch-up Contributions - 414(v)(2)(B)(ii)
3,000
3,000
3,000
3,000
All figures in US dollars.
Source: www.irs.gov
 
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