The Internal Revenue Service released the cost-of-living adjusted qualified retirement plan limitations effective January 1, 2020.  For ease of reference and comparison to prior years, we have placed the adjusted limitations in the table below.  For more information, refer to the Internal Revenue Service’s news release and Notice 2019-59 and to the Social Security Administration’s October 10, 2019, fact sheet.

Qualified Plan Limits

Type of Limitation 2020 2019 2018 2017 2016
Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $19,500 $19,000 $18,500 $18,000 $18,000
Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) $6,500 $6,000 $6,000 $6,000 $6,000
SIMPLE Salary Deferral $13,500 $13,000 $12,500 $12,500 $12,500
SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $3,000 $3,000 $3,000
415 limit for Defined Benefit Plans $230,000 $225,000 $220,000 $215,000 $210,000
415 limit for Defined Contribution Plans $57,000 $56,000 $55,000 $54,000 $53,000
Annual Compensation Limit $285,000 $280,000 $275,000 $270,000 $265,000
Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993  

$425,000

 

$415,000

 

$405,000

 

$400,000

 

$395,000

Highly Compensated Employee 414(q)(1)(B) $130,000 $125,000 $120,000 $120,000 $120,000
Key employee in top heavy plan (officer) $185,000 $180,000 $175,000 $175,000 $170,000
Tax Credit ESOP Maximum balance $1,150,000 $1,130,000 $1,105,000 $1,080,000 $1,070,000
Amount for Lengthening of 5-Year ESOP Period $230,000 $225,000 $220,000 $215,000 $210,000
Taxable Wage Base $137,700 $132,900 $128,400 $127,200 $118,500
IRAs for individuals 49 and below $6,000 $6,000 $5,500 $5,500 $5,500
IRAs for individuals 50 and above $7,000 $7,000 $6,500 $6,500 $6,500
FICA Tax for employees and employers 7.65% 7.65% 7.65% 7.65% 7.65%
Social Security Tax for employees and employers 6.2% 6.2% 6.2% 6.2% 6.2%
Medicare Tax for employers and employees 1.45% 1.45% 1.45% 1.45% 1.45%
Additional Medicare Tax for single or head of household* .9% of comp
>$200,000
.9% of comp
>$200,000
.9% of comp
>$200,000
.9% of comp
>$200,000
.9% of comp
>$200,000
Additional Medicare Tax for married filing jointly filing status* .9% of comp
>$250,000
.9% of comp
>$250,000
.9% of comp
>$250,000
.9% of comp
>$250,000
.9% of comp
>$250,000
*For taxable years beginning after 12/31/12, an employer must withhold Additional Medicare Tax on wages or compensation paid to an employee in excess of $200,000 in a calendar year for single/head of household filing status ($250,000 for married filing jointly).