JD, LLM, Managing Director - National Tax Services
View full biography
IRS releases 2020 COLA-based limits for retirement plans, IRAs
The IRS has released its 2020 cost-of-living-adjusted limitation amounts for tax-qualified retirement plans and IRAs. Read on for a summary of the most important changes.
- 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.
Related Insights
-
InsightNew regulations proposed for post-2019 income tax withholding, with guidance for new W-4Dana FriedEffective for 2020, there are new proposed regulations for income tax withholding on employee wages, including a new W-4. Here’s what to know.
-
InsightNew Jersey enacts elective pass-through entity tax as workaround to federal SALT capHarry Golematis, Corey RosenthalNew Jersey is offering relief to taxpayers affected by the Tax Cuts and Jobs Act’s $10,000 cap on state and local tax deductions. Click to learn more.
-
InsightA reminder regarding nondeductible employer-provided employee parking expensesDana FriedHow should a business calculate its amount of nondeductible expenses for employer-provided employee parking? Brush up on current guidance on IRC Sec. 274(a)(4).
-
InsightIRS issues proposed regulations on TCJA changes to Section 162(m) $1M compensation deduction limitDana FriedHere’s what to know about definition of “covered employee”; “publicly held corporation” or “predecessor corporation” status; and more related to the expansion of IRC Sec. 162(m).
-
Insight2020 appropriations act edits, extends tax provisionsBrian Newman, Stephen Gregory, Michael BilletHere’s what to know about tax law changes in 2020 Further Consolidated Appropriations Act – and how they might mean refunds on your 2018 tax return.