On October 26, 2020, the Internal Revenue Service announced the cost-of-living adjustments (COLA) that will take effect on January 1, 2021 (IRS Notice 2020-79). These COLAs affect various contribution and deduction limits for qualified retirement plans, as well as the deductible contribution limits for traditional Individual Retirement Arrangements (IRAs).
Internal Revenue Code Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost-of-living increases. These adjustment procedures are similar to those used to adjust benefit amounts under IRC Section 215(i)(2)(A) or the Social Security Act.
虽然一些限制增加了, the majority of the limitations remain unchanged from the 2020 limits. 下面总结了更常见的限制, along with the applicable Code Section and/or Treasury Regulations Section (Regs).
The annual contribution limitation for defined contribution plans increases from $57,000 to $58,000(法典第(415(c)(1)(A)条).
The annual maximum considered compensation limit increases from $285,000 to $290,(法典第401(a)(17)条), 404(l),408 (k) (3) (C)和408 (k) (6) (D) (ii)).
The dollar limitation for determining the maximum account balance in an Employee Stock Ownership Plan (ESOP), 以五年为分配期, increases from $1,150,000 to $1,165,000; however the dollar amount used to determine the lengthening of the five-year distribution period remains unchanged at $230,000(守则第409(o)(1)(C)(ii)条).
The Social Security Taxable Wage Base increases from $137,700 to $142,800.
The compensation threshold for simplified employee pensions (SEPs) increases from $600 to $650. (Code Section 408(k)(2)(C)).
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Material discussed is meant for informational purposes only, 而且这也不能被理解为投资, tax, or legal advice. 请注意，个别情况可能有所不同. Therefore, this information should be relied upon when coordinated with individual professional advice.