On November 1, 2018 the Internal Revenue Service announced the cost of living adjustments (“COLAs”) for the dollar limitations for qualified plans and other related items for the 2019 tax year. Highlights in the COLAs include:
- The limit on annual IRA contributions has increased from $5,500 to $6,000. This is the first IRA contribution increase since 2013.
- The catch-up contribution limit for employees age 50 and over (for 401(k), 403(b) and most 457 plans) remains unchanged at $6,000.
- The annual benefit limit for defined benefit plans has increased from $220,000 to $225,000.
- The annual addition limit for defined contribution plans has increased from $55,000 to $56,000.
- The annual compensation limit under IRC § 401(a)(17), as well as other IRC sections, has increased from $275,000 to $280,000.
- The limit used in the definition of highly compensated employee has increased from $120,000 to $125,000.
- A summary of the limitations are as set forth below:
| 401(k) Plan Limits for Plan Year | 2019 | 2018 | 2017 | 2016 | 2015 |
| 401(k) Elective Deferrals | $19,000 | $18,500 | $18,000 | $18,000 | $18,000 |
| Annual Defined Contribution Limit | $56,000 | $55,000 | $54,000 | $53,000 | $53,000 |
| Annual Compensation Limit | $280,000 | $275,000 | $270,000 | $265,000 | $265,000 |
| Catch-Up Contribution Limit | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 |
| Highly Compensated Employees | $125,000 | $120,000 | $120,000 | $120,000 | $120,000 |
| Non-401(k) Related Limits | |||||
| 403(b)/457 Elective Deferrals | $19,000 | $18,500 | $18,000 | $18,000 | $18,000 |
| SIMPLE Employee Deferrals | $13,000 | $12,500 | $12,500 | $12,500 | $12,500 |
| SIMPLE Catch-Up Deferral | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
| SEP Minimum Compensation | $600 | $600 | $600 | $600 | $600 |
| SEP Annual Compensation Limit | $280,000 | $275,000 | $270,000 | $265,000 | $265,000 |
| Social Security Wage Base | $132,900 | $128,400 | $127,200 | $118,500 | $118,500 |
For additional information contact Whitney Wallingford ([email protected]) or Brian Ritchie ([email protected]).