2020 Plan Limits

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:

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
415(c) Limit $57,000
Annual Compensation Limit    $285,000     
HCE Compensation Limit          $130,000     
Maximum Pension at age 62                $230,000     
SIMPLE Deferrals    $13,500      
SIMPLE Catch-up        $3,000   
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
Family $7,000 $7,100 Up $100
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
Family $2,700 $2,800 Up $100
HDHP Max Out-of-Pocket Self-only $6,750 $6,900 Up $150
Family $13,500 $13,800 Up $300



FSA Limits for 2020

2019 2020 Change
$2,700 $2,750 Up $50


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.

 

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