IRS Announces Year 2020 Retirement Plan Limits
The Internal Revenue Service (“IRS”) announced today (November 6, 2019) the following dollar limits applicable to tax-qualified plans for 2020:
- The limit on the maximum amount of elective contributions that a person may make to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan increased from $19,000 to $19,500.
- The limit on “catch-up contributions” to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan for persons age 50 and older is increased from $6,000 to $6,500.
- The dollar limit on the maximum permissible allocation under a defined contribution plan is increased from $56,000 to $57,000.
- The maximum annual benefit under a defined benefit plan is increased from $225,000 to $230,000.
- The maximum amount of annual compensation that may be taken into account on behalf of any participant under a qualified plan will go from $280,000 to $285,000.
- The dollar amount used to identify “highly compensated employees” is increased from $125,000 to $130,000.
Additional information regarding benefit plan dollar limits can be obtained in IRS Notice 2019-59.
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