Retirement Plan Limitations for 2020

November 11, 2019

By Peter Alwardt, CPA and Barry Levine, JD

As an ongoing service to our clients, EisnerAmper LLP is providing this Alert to keep you abreast of the recent changes affecting employee benefit plans.

The Internal Revenue Service announced on November 6 the cost-of-living adjustments applicable to the dollar limitations for defined contribution and defined benefit plans for the tax year 2020. Many of the limits have changed from 2019, as noted below.

Code Section  2020 2019   2018
IRAs 
IRA Contribution Limit – 219(b)(5)(A)     $6,000 6,000 5,500 
IRA Catch-Up Contributions – 219(b)(5)(B)     $1,000 1,000 1,000 
  
SEP 
SEP Minimum Compensation – 408(k)(2)(C)        $600 600 600 
SEP Maximum Compensation – 408(k)(3)(C)     $285,000 280,000 275,000 
401(k), 403(b), Profit-Sharing Plans, etc. 
Annual Compensation – 401(a)(17)/404(l)     $285,000 280,000 275,000 
Elective Deferrals – 402(g)(1)     $19,500 $19,000 18,500
Catch-up Contributions – 414(v)(2)(B)(i)     $6,500 6,000 6,000
Defined Contribution Limits – 415(c)(1)(A)      $57,000 56,000 55,000 
ESOP Limit – 409(o)(1)(C) – Account Balance     $1,150,000 1,130,000 1,105,000  
ESOP Limit – 409(o)(1)(C) – Lengthening 5-Year Period $230,000 225,000 220,000 
Other 
HCE Threshold – 414(q)(1)(B)               $130,000 125,000 120,000 
Defined Benefit Annual Limit – 415(b)(1)(A)     $230,000 225,000 220,000 
Key Employee – 416(i)(1)(A)(i)     $185,000 180,000 175,000 
457 Elective Deferrals – 457(e)(15)     $19,500 19,000 18,500
Control Employee – 1.61-21(f)(5)(i)       $115,000 110,000 110,000 
Control Employee – 1.61-21(f)(5)(iii)     $230,000 225,000 220,000 
Social Security Taxable Wage Base     $137,700 132,900 128,400

 

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About Peter Alwardt

Peter Alwardt is a Tax Partner specializing in employee benefits, tax and ERISA issues for domestic and international clients. He is a member of the American Institute of Certified Public Accountants and NY State Society of CPAs.

About Barry Levine

Barry Levine is a Tax Director specializing in employee benefits, tax and ERISA issues. He has written articles on employee benefit legal issues for various legal and employee benefits professional publications.

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