The 2020 IRA and pension plan limitations have been announced.
Below are some of the more common amounts for 2020.
- The defined benefit plan limitation remains at $230,000 ($225,000 for 2019).
- The defined contribution plan maximum remains at $57,000 ($56,000 for 2019).
- The annual compensation limit for most employer contributions is $285,000 ($280,000 for 2019).
- The Retirement Savers Credit is completely phased out at: MFJ = $65,000, HH = 48,750, and all others = $32,500 (up from $64,000, $48,000, and $32,000 respectively for 2019).
- A year of service for SEP coverage remains at $600.
- The maximum elective deferral for §401(k), §403(b), §457, and SARSEPs is $19,500 (up from $19,000 for 2019). The catchup contribution limit for those aged 50 or older as of the end of the year is $6,500 (up from $6,000 for 2019).
- The maximum elective deferral to SIMPLE plans increases to $13,500 (up from $13,000 for 2019). The catch-up maximum remains at $3,000.
- The maximum contribution to IRAs remains at $6,000. The catch-up for IRAs is not subject to annual indexing and remains at $1,000.
- The modified AGI phase-out ranges are: $65,000-$75,000 (up from $64,000-$74,000); MFJ = $104,000-$124,000 (up from $103,000-$123,000); and MFJ when the taxpayer is not covered but the spouse is = $196,000-$206,000 (up from $193,000-$203,000).
- Roth IRA AGI phase-out limits increase to $124,000-$139,000 (up from $122,000-$137,000). For MFJ these amounts are $196,000-$206,000 (up from $193,000-$203,000).
- The definition of highly compensation for purposes of section 414(q)(1)(B) increases to $130,000 (up from $125,000).
- The IRS News Release also has the other pension related indexed amounts such as key employee, top heavy, and “control employee” limits.
A copy of Notice 2019-59 can be found at www.irs.gov/pub/ by clicking on irs-drop and then clicking on n-2019-59.
