11.7.19

By Sue Peirce, CPA, MTax | Principal, Audit & Assurance

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. 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