IRS Announces 2021 Plan Limitations
The IRS has recently announced the qualified plan limitations for 2021, which are determined based on annual increases in the cost of living index. Because there was only a modest increase in the index, most of the plan limits have not changed from 2020. For your convenience we have included a downloadable compliance bulletin, detailing the current and new plan limitations:
- 401k Deferral Limit remained the same: $19,500
- The maximum amount that can be contributed by and for a participant to a
defined contribution plan – Increased to $58,000 - The maximum amount of compensation taken into account for plan purposes – Increased to $290,000
- The catch-up contribution for participants who have attained age 50 remained the same: $6,500
- The compensation-based definition of highly compensated employee remained the same: $130,000
- The maximum annual benefit payable from a defined benefit plan remained the same: $230,000
- The definition of a “key employee” remained the same: An officer making more than $185,000
- The Social Security taxable wage base: Increased to $142,800
If you have any questions regarding your qualified plan, please contact Innovative Benefit Planning at resources@iifria.com
