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IRS releases 2019 inflation adjustments for qualified retirement plans

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Tax Hot Topics newsletterThe IRS issued Notice 2018-83 to provide the inflation-adjusted 2019 dollar limitations for benefits and contributions under qualified retirement plans. A summary of limitations for various plans is provided below:

  • 401(k) plans: The employee contribution limit for 401(k) plans and other retirement accounts (including Roth 401(k) plans) is increased from $18,500 to $19,000 in 2019. The limit for catch-up contributions for individuals 50 and older remains unchanged at $6,000.
  • Defined contribution plans: The limit for total employee and employer contributions to defined contribution plans is increased from $55,000 to $56,000 in 2019.
  • Defined benefit plans: The limit on annual benefits from a defined benefit plan is increased from $220,000 to $225,000 in 2019.
  • Compensation limits: The annual compensation limit for certain tax-favored retirement plans is increased from $275,000 to $280,000 in 2019.
  • Individual retirement accounts: The deductible amount for contributions to an IRA is increased from $5,000 to $6,000 in 2019. The limit for catch-up contributions for individuals 50 and older remains unchanged at $1,000. The start of the adjusted gross income (AGI) phase-out for deductibility of IRA contributions for individuals who participate in an employer retirement plan is increased from $63,000 to $64,000 for singles, and from $101,000 to $103,000 for joint filers. The start of the AGI phase-out for contributions to a Roth IRA is increased from $120,000 to $122,000 for singles, and from $189,000 to $193,000 for joint filers.

Notice 2018-83 is effective Jan. 1, 2019.

Contact
Jeff Martin
Partner, Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director, Washington National Tax Office
T +1 202 521 1554

James Sanchez
Senior Associate, Washington National Tax Office
T +1 202 861 4107

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