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:
- https://www.irs.gov/pub/irs-drop/n-19-59.pdf
- https://www.irs.gov/pub/irs-drop/rp-19-44.pdf
- https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf
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.
