Today, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020.
Technical guidance detailing these items are in Notice 2019-59.
The following table details the plan contribution limits by year for your convenience.
| PLAN TYPE | 2020 | 2019 |
| 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan | $19,500 | $19,000 |
| Catch-up for 50 and older | $6,500 | $6,000 |
| PLAN TYPE | 2020 | 2019 |
| IRA Contributions | $6,000 | $6,000 |
| Catch-up for 50 and older | $1,000 | $1,000 |
Other limits included in IRS Notice 2019-59 include:
- Effective January 1, 2020, the limitation on the annual benefit under a defined benefit (DB) plan under § 415(b)(1)(A) is increased from $225,000 to $230,000.
- The limitation for defined contribution (DC) plans under § 415(c)(1)(A) is increased in 2020 from $56,000 to $57,000.
- The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and408(k)(6)(D)(ii) is increased from $280,000 to $285,000.
- The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $180,000 to $185,000.
- The limitation used in the definition of “highly compensated employee” under§ 414(q)(1)(B) is increased from $125,000 to $130,000.
