New Plan Limits for 2020
On October 26, 2020, the IRS announced cost of living adjustments affecting qualified retirement plans for 2021. Several the limits are unchanged from the limits which were in place for 2020.
Selected Limits
|
2021 |
2020 |
|
|
401(k) Elective Deferrals |
$19,500 |
$19,500 |
|
401(k) Catch Up Deferrals |
$6,500 |
$6,500 |
|
Annual Defined Contribution Limit (Section 415)* |
$58,000 |
$57,000 |
|
Annual Compensation Limit ** |
$290,000 |
$285,000 |
|
Highly Compensated Employees (look-back year calculation)** |
$130,000 |
$130,000 |
|
Key Employee – Officer Threshold* |
$185,000 |
$185,000 |
|
Social Security Wage Base |
$142,800 |
$137,700 |
|
ESOP Threshold Balance for lengthening the 5-year installment period |
$1,165,000 |
$1,150,000 |
|
Amount for lengthening the 5-year ESOP installment period |
$230,000 |
$230,000 |
*Effective for limitation years ending in calendar year
**Effective for plan years beginning in the calendar year
The Adjusted Gross Income limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $66,000 for married couples filing jointly, up from $65,000; $49,500 for heads of household, up from $48,750; and $33,000 for married individuals filing separately and for singles, up from $32,500.
