The IRS has announced the 2020 pension plan limits, including the following:
· 401(k), 403(b) and most 457 plans Deferral Limit - $19,500—This is a $500 increase from the 2019 limits.
· Annual Additions Limit - $57,000—This is a $1,000 increase from the 2019 threshold.
· Maximum Compensation Limit - $285,000—This is a $5,000 increase from the 2019 limit.
· Catch-Up Contribution Limit - $6,500—This is a $500 increase from the 2019 threshold.
· Highly Compensated Employee - $130,000—This is a $5,000 increase from the 2019 threshold.
· The annual benefit under a defined benefit plan under Section 415(b)(1)(A) - $230,000.—This is an increase of $5,000 from the 2019 limit.
· ESOP 5-Year Distribution Threshold - $1,150,000—This is a $20,000 increase from the 2019 limit.
· ESOP Additional Year Threshold - $230,000—This is a $5,000 increase from the 2019 limit.
· The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is $185,000 which is an increase of $5,000 from the 2019 limit.
Here is the link to the full announcement which includes additional details:
https://www.irs.gov/pub/irs-drop/n-19-59.pdf
If you have any questions about the information above, or have anything other questions related to your employee benefit plan audit, send us an email at info@btandcocpa.com or give Stacey Hammond or Dusty Wagoner a call at (785) 234-3427.