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Cost-of-Living Adjusted Limits for 2020

Posted by Robert K. Butterfield | Nov 06, 2019 | 0 Comments

The Internal Revenue Service announced cost-of-living adjusted limits for 2020. Here are some of the adjustments:

  •  The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) is increased from $19,000 to $19,500.
  • The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and 408(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 dollar amount under § 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5-year distribution period is increased from $1,130,000 to $1,150,000, while the dollar amount used to determine the lengthening of the 5-year distribution period is increased from $225,000 to $230,000.
  • The limitation used in the definition of “highly compensated employee” under § 414(q)(1)(B) is increased from $125,000 to $130,000.
  • The dollar limitation under § 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in § 401(k)(11) or § 408(p) for individuals aged 50 or over is increased from $6,000 to $6,500. The dollar limitation under § 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in § 401(k)(11) or § 408(p) for individuals aged 50 or over remains unchanged at $3,000.

 Click here to download the entire IRS Notice 2019-59.

About the Author

Robert K. Butterfield

Robert Butterfield's practice emphasis is on employee benefits, executive compensation, ERISA, estate planning and corporate planning.

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