IRS releases 2020 COLA-based limits for retirement plans, IRAs
- Defined benefit plan annual accrual limit – increased from $225,000 to $230,000.
- Defined contribution plan annual addition limit – increased from $56,000 to $57,000.
- Elective deferrals annual limit – increased from $19,000 to $19,500.
- Annual compensation limit – increased from $280,000 to $285,000.
- Compensation threshold for top-heavy plan “key employee” status – increased from $180,000 to $185,000.
- Compensation threshold for “highly compensated employee” status – increased from $125,000 to $130,000.
- Dollar limit for catch-up contributions for individuals aged 50 or over – increased from $6,000 to $6,500.
- Contribution limit for SIMPLE retirement accounts – increased from $13,000 to $13,500.
- Annual maximum deductible amount for traditional IRA contributions – remains unchanged at $6,000.
- Dollar amount for determining deductible amount of traditional IRA contributions for active participants in an employer retirement plan filing a joint return or as a qualifying widow(er) – increased from $103,000 to $104,000.
- Dollar amount for determining deductible amount of a traditional IRA contribution for all others who are active participants in an employer retirement plan (other than married taxpayers filing separate returns) – increased from $64,000 to $65,000.
- Adjusted gross income limit for determining deductible amount of a traditional IRA contribution if not an active participant in an employer retirement plan but spouse is an active participant – increased from $193,000 to $196,000.
- Adjusted gross income phase-out range for determining deductible amount for traditional IRA contributions for single individuals and heads of household who are active participants in an employer retirement plan – increased from $64,000-$74,000 to $65,000-$75,000.
- Adjusted gross income phase-out range for determining deductible amount for traditional IRA contributions for married couples filing jointly where the spouse who makes the traditional IRA contribution is an active participant in an employer retirement plan – increased from $103,000-$123,000 to $104,000-$124,000.
- Adjusted gross income phase-out range for determining deductible amount for traditional IRA contributions by an individual who is not an active participant in an employer retirement plan but whose spouse is an active participant – increased from $193,000-$203,000 to $196,000-$206,000.
- Adjusted gross income limit for determining maximum Roth IRA contributions if married and filing jointly or if filing as a qualifying widow(er) – increased from $193,000 to $196,000.
- Adjusted gross income limit for determining maximum Roth IRA contributions for all others (other than married taxpayers filing separate returns) – increased from $122,000 to $124,000.
- Adjusted gross income phase-out range for contributions to a Roth IRA for married couples filing jointly – increased from $193,000-$203,000 to $196,000-$206,000.
- Adjusted gross income phase-out range for contributions to a Roth IRA for singles and heads of household – increased from $122,000-$137,000 to $124,000-$139,000.
Dana Fried, Managing Director, National Tax
516.417.5064
Related Services
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
-
InsightIRS postpones 2020 individual income tax filing and payment deadline to May 17Patrick Duffany, Brian Newman, Yasmina BersbachTaxpayers have until May 17 for federal individual income tax returns and payments. The deferral does not apply to estimated tax, and state deadlines vary. Read more.
-
InsightEmployee Retention Credit (ERC) now available for all of 2021, and PPP loan recipients can claim ERCsDana FriedRead how ERC requirements have changed for 2021, including what counts as qualified wages, who is an eligible employer, the maximum credit amount, and more.
-
InsightIRS: Amounts used as ‘payroll costs’ in 2020 PPP loan forgiveness applications are ineligible for retroactive 2020 Employee Retention CreditsDana FriedEmployers retroactively eligible for 2020 Employee Retention Credits (ERCs) will be held to the Payroll Costs reported on their PPP loan forgiveness applications.
-
InsightTop considerations for for-profit recipients of Provider Relief Funds: Reporting, compliance, tax impacts, and moreSteven SchwartzLearn when and how to report on use of the federal COVID-19 healthcare funding, the tax and Single Audit implications, and other information for providers.
-
InsightHow individual and business tax rates, credits, and more could change under the Biden presidencyJoe Biden has proposed or supported changes across the tax landscape. Read a summary of notable ones that could impact individuals and businesses.