IRS releases 2019 contribution limits: What’s vital for Payroll Latest figures for 401(k)s and other retirement plans The IRS has officially released the 2019 cost-of-living adjustments to the dollar limits for contributions to qualified retirement plans. Here’s the info you’ll need to know when making deductions from employees’ pay to fund these plans as of Jan 1, 2019. New plan limits The annual elective deferral limit for the 401(k) and 403(b) plans will rise to $19,000 in 2019, a $500 increase over the limit from last year. This is the maximum amount employees can contribute via salary deductions. With annual contributions to defined contribution plans, such as profit sharing plans or a 401(k), the overall amount contributed can’t exceed $56,000 in 2019. The 2019 limitation on the annual benefit of a defined benefit plan will be $225,000. In addition, the maximum amount of the employee compensation that can be taken into account for benefit calculations and nondiscrimination tests will be $280,000 in 2019. (For eligible participants in certain government plans, the amount will be $415,000). When it comes to 457 deferred compensation plans for tax-exempt organizations and state and local governments, the new limit for employee elective deferrals will be $19,000. For catch-u contributions to 410(k), 403(b) and 457 plans, the limit for 2019 will remain $6,000. Income guidelines Besides contribution limits, the IRS also announced new income thresholds for certain employees and plans. The 2019 threshold for a highly compensated employee is $125,000. Employees earning at least that amount next year may be classified as highly compensated for 2020 with stricter contribution limits in effect. The new income threshold for a worker to be considered a “key employee” when figuring out plan eligibility guidelines will be $180,000. Finally, for simplified employee pensions, the minimum compensation threshold will still be $600 in 2019. Cite: