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: • Compensation limit used in calculating a participant’s benefit accruals: increased to $285,000. • Elective deferrals to 401(k) and 403(b) plans: increased to $19,500. • Annual additions to a defined contribution plan: increased to $57,000. • Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: increased to $6,500. • Annual benefit limit for a defined benefit plan: increased to $230,000. • Compensation dollar limit for defining a “key employee” in a top heavy plan: increased to $185,000. • Compensation dollar limit for defining a “highly compensated employee”: 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: • Health flexible spending account limit: increased to $2,750. • Qualified transportation fringe benefit limits for parking and transit: each increased to $270. • Adoption assistance program limit: increased to $14,300. • 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.