IRS Announces Increases on Benefits and Contributions Dollar Limitations

Posted by Saaib T. Uppal, CPA 

The IRS has announced  cost-of-living adjustments that should be noted for retirement planning purposes.

Below is a chart that outlines employee benefit plan limits for 2019:

PLAN LIMITS
RETIREMENT & SOCIAL SECURITY 2019 Limit 2018 Limit 2017 Limit
Section 401(k), 403(b), 457(b) elective deferrals  $19,000  $18,500  $18,000
401(k) or 403(b) catch up contributions  6,000  6,000  6,000
Section 415 – Defined contribution plan maximum annual contributions without catch up  56,000  55,000  54,000
Section 415 – Defined benefit plan maximum annual benefit  225,000  220,000  215,000
Section 414(q)(1)(B) – Highly compensated employee -minimum compensation (applies to look back years in indicated year)  125,000  120,000  120,000
Section 416 – Key employee definition – officer compensation  180,000  175,000  175,000
Section 416 – Key employee definition – 1% owner compensation  150,000  150,000  150,000
Section 401(a)(17) – Maximum includible annual compensation  280,000  275,000  270,000
IRA or Roth IRA annual contribution limit  6,000  5,500  5,500
IRA or Roth IRA annual catch up contributions  1,000  1,000  1,000
SIMPLE Salary Deferral Limit  13,000  12,500  12,500
SIMPLE Catch-up Limit  3,000  3,000  3,000

 

Plan administrators should ensure they pass along this new information to their participants so they have all the required information when planning their deferrals for 2019.

Leave a Reply