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.