It’s that time of year once again when the United States Internal Revenue Service has announced its 2019 limitations on retirement plans for the 2019 tax year. Human resources and payroll should update their systems and employee communications as appropriate reflecting changes effective January 1, 2019.
Limits Defined Contribution Plans 401(k), 403(b), 457 & Most Federal Thrift Savings Plans |
2018 | 2019 |
Maximum elective deferral (employee) | $18,500 | $19,000 |
Maximum contribution – all sources (employee & employer) | $55,000 | $56,000 |
Age 50+* catch-up contribution (employee) | $6,000 | $6,000 |
Age 50+* maximum contribution – all sources plus catch up (employee & employer) | $61,000 | $62,000 |
Compensation ceiling for calculating contributions | $275,000 | $280,000 |
Nondiscrimination testing – compensation limitation for “key employees” | $175,000 | $180,000 |
Nondiscrimination testing – compensation limitation for “highly compensated employees” | $120,000 | $125,000 |
Limits Defined Benefit Plans |
2018 | 2019 |
Annual benefit limitation | $220,000 | $225,000 |
The IRS also announced the Individual Retirement Account (IRA) limits effective January 1, 2019:
Limits Individual Retirement Accounts |
2018 | 2019 |
Annual contribution limit | $5,500 | $6,000 |
Age 50+* annual catch-up contribution not subject to annual cost-of-living adjustment | $1,000 | $1,000 |
*If age 50+ by year-end
Additional information on the 2019 limitations on retirement plans and further technical guidance may be found in the IRS source documents as noted below:
IRS Bulletin IR-2018-211
IRS Notice 2018-83
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