Contributing Author: Kristine M. Custodio, ACP, Senior Paralegal
On November 1, 2018, the Internal Revenue Service announced cost-of-living adjustments which will be affecting dollar limitations for qualified pension plans for the 2019 tax year. Section 415 of the Internal Revenue Code provides for annual dollar limitations on benefits and contributions under qualified retirement plans. Pursuant to Section 415(d) of the Code, the Secretary of the Treasury must annually adjust these limitations for increases in the cost-of-living. Most notably, participants in a 401(k) plan may contribute in 2019 up to $19,000 of their income, an increase from the 2018 limitations on contributions to a 401(k) plan of $18,500 for an elective deferral. Additional catch-up contribution for the 2019 tax year for participants in a 401(k) plan who have reached age 50 or over remains unchanged at $6,000.
For a detailed list of dollar limitations for 2019, please click here to read IRS Notice 2018-83.
If you are thinking about adopting a qualified retirement plan for yourself or your employees, or have any questions regarding an existing plan, please contact the law firm of Butterfield Schechter LLP who will be pleased to assist you.