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Updated Employee Benefit Plan and IRA Quick Reference Table 2019 and 2020

 

Updated Employee Benefit Plan and IRA Quick Reference Table 2019 and 2020

Nov 07, 2019

The Internal Revenue Service has announced the cost-of-living adjustments applicable to dollar limitations for various qualified retirement plans and other amounts for 2020.

Pension plan limitations changed for 2020 because the increase in cost-of-living index met the statutory thresholds that trigger their adjustments. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits.

We recommend reviewing communications that specify benefit plan limits for accuracy before materials are given to participants.

If you have any questions, or for more information about the 2020 cost-of-living adjustments for retirement plans, please contact Marci Boyarski, Angie Whiteside, Tom Krieg, Bob Buss, or your Wipfli relationship executive.

2019 2020
Compensation Limit [IRC Sec. 401(a)(17)] $280,000 $285,000
Defined Benefit Plan Annual Benefit Limit $225,000 $230,000
Defined Contribution Plan Annual Contribution Limit $56,000 $57,000
Social Security Tax Wage Base $132,900 $137,700
Highly Compensated Employee Compensation Threshold $125,000 $130,000
Key Employee Officer Compensation Threshold $180,000 $185,000
SEP Compensation Threshold $600 $600
401(k), 403(b), 457(b), and SARSEPs
Elective Deferral Limit 2 $19,000 $19,500
Catch-up Contribution 3 $6,000 $6,500
SIMPLE Plan
Elective Deferral Limit 2 $13,000 $13,500
Catch-up Contribution 3 $3,000 $3,000
IRA
Contribution Limit 2 $6,000 $6,000
Catch-up Contribution 3 $1,000 $1,000
Traditional IRA Deduction Phaseout (AGI)
Single, Head of Household - active participant $64,000/$74,000 $65,000/$75,000
Married Filing Separate - any spouse participates $0/$10,000 $0/$10,000
Married Filing Joint - nonparticipating spouse $193,000/$203,000 $196,000/$206,000
Married Filing Joint - participating spouse $103,000/$123,000 $104,000/$124,000
Roth IRA Contribution Eligibility (AGI)
Married Filing Joint $193,000/$203,000 $196,000/$206,000
Single, Head of Household $122,000/$137,000 $124,000/$139,000
Married Filing Separate - any spouse participates $0/$10,000 $0/$10,000
Retirement Saver's Credit Eligibility (AGI)
Married Filing Joint $ 64,000 $ 65,000
Head of Household $ 48,000 $ 48,750
Married Filing Separate, Single $ 32,000 $ 32,500

Wipfli's Employee Benefit Services practice is an independent, fee-for-service consulting, record keeping and compliance provider dedicated to helping clients meeting their employee benefit needs. Wipfli LLP has been providing qualified and non-qualified plan services for over 30 years.

1This table has been updated based on IRS Notice (2019-59), November 6, 2019.
2This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs, and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
3Catch-up contributions are available each year to individuals who reach age 50 by December 31.