IRS Issues 2019 Cost of Living Adjustments

  • November 13, 2018

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]).