On November 6, 2019 the IRS released the annual inflation adjustments for more than 60 tax provisions. Here is a summary of the important 2020 limits:
|Type of Limit||Limit Amount|
|401(k), 403(b) & 457(b) deferrals||$19,500|
|Catch-up 401(k), 403(b) & 457(b)||$6,500|
|Annual Compensation Limit||$285,000|
|HCE Compensation Limit||$130,000|
|Maximum Pension at age 62||$230,000|
|SEP Minimum Compensation||$600|
|Key Employee Limit, Officer Test||$185,000|
|IRAs for individuals age 49 & below||$6,000|
|IRAs for individuals age 50 & above||$7,000|
|Social Security Taxable Wage Base||$137,700|
HSA Limits for 2020
|Type of Limit||2019||2020||Change|
|HSA Contribution Limit||Self-only||$3,500||$3,550||Up $50|
|HSA Catch-up Contributions||Age 55 or older||$1,000||$1,000||No change|
|HDHP Minimum Deductible||Self-only||$1,350||$1,400||Up $50|
|HDHP Max Out-of-Pocket||Self-only||$6,750||$6,900||Up $150|
FSA Limits for 2020
Other Important Limits
- The amount for the adoption credit or the amount excluded for adoption assistance allowed for an adoption of a child with special needs is increased to $14,300.
- The dollar amount for employee health Insurance expense of small employers is $27,600.
- The monthly limitation for qualified transportation fringe benefit regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $270. The monthly limit for qualified parking is also $270.
- The deductible and out-of-pocket limits for "high deductible health plans" for Medical Savings Accounts are as follows:
- For self-only coverage, a health plan that has an annual deductible that is not less than $2,350 and not more than $3,550, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,750.
- For family coverage, a health plan that has an annual deductible that is not less than $4,750 and not more than $7,100, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,650
- The dollar total amount of payments and reimbursements for any year under a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) can not exceed $5,250 ($10,600 for family coverage).
Visit the IRS notices for the full listing of 2020 limits and changes:
This blog post is not intended to be exhaustive nor should any discussions or opinions be construed as legal advice - it is intended for educational and/or informational purposes only.