COLA INCREASES FOR DOLLAR LIMITATION PENSION BENEFITS AND PENSION CONTRIBUTIONS
The tax law places limits on the dollar amount of contributions to retirement plans IRAs and the amount of benefits under a pension plan. IRC Section 425 requires the limits to be adjusted annually for cost-of-living increases.
- Limits by plan type (IRA, 401(k), SEP, SIMPLE IRA, 403(b), 457(b), defined benefits)
- 2021 cost-of-living adjustments for pension plans and retirement-related items (IR-2020-244)
- COLA Table for prior years’ dollar limitations and Internal Revenue Code references.
| IRAs | 2021 | 2020 | 2019 |
| IRA Contribution Limit | $6,000 | $6,000 | $6,000 |
| IRA Catch-Up Contributions | $1,000 | $1,000 | $1,000 |
| Traditional IRA AGI Deduction Phase-out Starting at | 2021 | 2020 | 2019 |
| Joint Return | 105,000 | 104,000 | 103,000 |
| Single or Head of Household | 66,000 | 65,000 | 64,000 |
| SEP | 2021 | 2020 | 2019 |
| SEP Minimum Compensation | 650 | 600 | 600 |
| SEP Maximum Contribution | 58,000 | 57,000 | 56,000 |
| SEP Maximum Compensation | 290,000 | 285,000 | 280,000 |
| IRAs | 2021 | 2020 | 2019 |
| SIMPLE Plans | 2021 | 2020 | 2019 |
| SIMPLE Maximum Contributions | 13,500 | 13,500 | 13,000 |
| Catch-Up Contributions | 3,000 | 3,000 | 3,000 |
| 401(k), 403(b), Profit-Sharing Plans, etc. | 2021 | 2020 | 2019 |
| Annual Compensation | 290,000 | 285,000 | 280,000 |
| Elective Deferrals | 19,500 | 19,500 | 19,000 |
| Catch-Up Contributions | 6,500 | 6,500 | 6,000 |
| Defined Contribution Limits | 58,000 | 57,000 | 56,000 |
| ESOP Limits | 1,165,000 230,000 | 1,150,000 230,000 | 1,130,000 225,000 |
| Other | 2021 | 2020 | 2019 |
| HCE Threshold | 130,000 | 130,000 | 125,000 |
| Defined Benefit Limits | 230,000 | 230,000 | 225,000 |
| Key Employee | 185,000 | 185,000 | 180,000 |
| 457 Elective Deferrals | 19,500 | 185,000 | 19,000 |
| Control Employee (board member or officer) | 115,000 | 115,000 | 110,000 |
| Control Employee (compensation-based) | 235,000 | 230,000 | 225,000 |
| Taxable Wage Base | 142,800 | 137,700 | 132,900 |
RE: IRS Notice 2020-79
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