Client Alerts 2020 Employee Benefit Plan and Transportation Limits

Publication
11.08.19 | By: Larry A. Ruff

The Internal Revenue Service (“IRS”) recently announced 2020 cost-of-living adjustments for retirement and health and welfare plans and transportation programs. The majority of limits increased modestly for 2020, while a few dollar limits, such as the IRA contribution limit, will remain the same. Notable increases in 2020 are the defined benefit and contribution plan limits, elective deferral limits and age 50 catch-up contributions.

read more

Retirement Plan Limits

The 2020 annual retirement plan limitations as compared to 2019 are as follows:

  2020 2019
401(k), 403(b) and 457(b) Plan Elective Deferrals  $19,500 $19,000
Age 50 Catch-Up contribution (For Above Plans)  $6,500 $6,000
SIMPLE Plan Elective Deferrals $13,500 $13,000
SIMPLE Plan Age 50 Catch-Up Contribution $3,000 $3,000
IRA Contribution Limit (Traditional and Roth) $6,000 $6,000
IRA Age 50 Catch-Up Contribution (Not Indexed) $1,000 $1,000
Defined Contribution Plan Limit $57,000 $56,000
Defined Benefit Plan Limit $230,000 $225,000
Annual Compensation Limit $285,000 $280,000
Highly Compensated Employee $130,000 $125,000
Key Employee $185,000 $180,000
FICA Taxable Wage Base            $137,700 $132,900

Health and Welfare Plan Limits

The 2020 annual limitations as compared to 2019 are as follows:

  2020 2019
Flexible Spending Accounts (FSA) $2,750 $2,700
Dependent Care FSA (Not Indexed) $5,000 $5,000
Health Savings Account (HSA) Age 55 Catch-Up Contribution (Not Indexed) $1,000 $1,000
Self-Only Coverage:    
HSA Contribution $3,550 $3,500
Minimum Deductible for High Deductible Health Plan (HDHP) $1,400 $1,350
Maximum OOP Expense Limit for HDHP $6,900 $6,750
Family Coverage:    
HSA Contribution $7,100 $7,000
Minimum Deductible for HDHP $2,800 $2,700
Maximum OOP Expense Limit for HDHP $13,800 $13,500

Qualified Transportation Fringe Benefit Limits

The 2020 monthly qualified transportation fringe benefit limitations as compared to 2019 are as follows:

  2020 2019
Parking and Transit $270 $265
Bicycle $20 $20

Plan sponsors should update payroll and plan administration systems for the 2020 cost-of-living adjustments and incorporate the new limits in relevant employee and participant communications.

For further information about the new IRS employee plan limits, contact Larry Ruff at lruff@orba.com or 312.670.7444. Visit orba.com to learn more.

© 2019

News & Events

view all

Forward ThinkingClient Alerts

view all

Firms News

09.30.19

ORBA Human Resources Director Sarah Wonnell Appointed Board Chair of Windy City Performing Arts
Ostrow Reisin Berk & Abrams, Ltd. (ORBA), one of Chicago’s largest public accounting firms, is proud to announce that Human Resources Director Sarah Wonnell has been appointed as the new board chair of Windy City Performing Arts (WCPA) for a one-year term. Windy City Performing Arts is a not-for-profit organization that sings to inspire change, celebrate diversity and honor the dignity of the LGBTQ+ community.

view all

Media Mentions

05.14.19

BenefitsLink

Guides

ORBA will gladly provide you with hard copies of the useful guides listed below. Select which guides you would like to receive and submit the form below.

  • Tax Pocket Guide
  • Tax Planning Guide
  • Records Retention Schedule
  • Auto, Travel & Business Log

request guide

Close
Forward Thinking
Forward Thinking