The IRS recently announced the inflation-adjusted limits for 2020 for tax qualified retirement plans. Below is a list of some of the key annual limits that will apply in 2020: ?Çó Compensation limit used in calculating a participant?ÇÖs benefit accruals: increased to $285,000. ?Çó Elective deferrals to 401(k) and 403(b) plans: increased to $19,500. ?Çó Annual additions to a defined contribution plan: increased to $57,000. ?Çó Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: increased to $6,500. ?Çó Annual benefit limit for a defined benefit plan: increased to $230,000. ?Çó Compensation dollar limit for defining a ?Ç£key employee?Ç¥ in a top heavy plan: increased to $185,000. ?Çó Compensation dollar limit for defining a ?Ç£highly compensated employee?Ç¥: increased to $130,000. The complete list of 2020 plan limits is available in Notice 2019-59 here.
The IRS recently announced the following inflation-adjusted limits for 2020 for certain health and welfare plans: ?Çó Health flexible spending account limit: increased to $2,750. ?Çó Qualified transportation fringe benefit limits for parking and transit: each increased to $270. ?Çó Adoption assistance program limit: increased to $14,300. ?Çó Qualified Small Employer Health Reimbursement Arrangement limit: increased to $5,250 for individual coverage and $10,600 for family coverage. These, and certain other, 2020 plan limits are available in Notice 2019-44 here.