Contribution and Benefit Limits for 2019

IRS releases 2019 limits for deferred compensation arrangements and certain welfare plans.

The IRS was late this year in announcing its limits for certain benefit programs, but the notice has finally arrived. We are still waiting for updates to Flexible Spending Accounts and Transportation fringe benefit limits, but here are some of the other updates relevant for plan administrators:

2019 2018 2017 2016
Individual deferral limit
401(k), 403(b), and 457(b)
$19,000 $18,500 $18,000 $18,000
Age 50 Catch-up deferral limit 401(k) and 403(b) $6,000 $6,000 $6,000 $6,000
Maximum compensation $280,000 $275,000 $270,000 $265,000
Highly compensated employee* $125,000 $120,000 $120,000 $120,000
Key employee $180,000 $175,000 $175,000 $170,000
Defined contribution 415 limit $56,000 $55,000 $54,000 $53,000
Defined benefit 415 limit $225,000 $220,000 $215,000 $210,000
Healthcare flexible spending Not released $2,650 $2,600 $2,550
HSA contribution limits:

Self-only

Family

 

 

$3,500

$7,000

 

$3,450

$6,900

 

$3,400

$6,750

 

$3,350

$6,750

High Deductible Health Plan minimums/out of pocket maximums:

Self-only

Family

 

 

 

 

$1,350/$6,700

$2,700/$13,500

 

 

 

 

$1,350/$6,650

$2,700/$13,300

 

 

 

 

$1,300/$6,550

$2,600/$13,100

 

 

 

$1,300/$6,550

$2,600/$13,100

Transportation fringe benefit limit** Not released $260 $255 $250
Social Security (OASDI) taxable wage base $132,900 $128,400 $127,200 $118,500

Fiscal year plans: Plans that do not operate on a calendar year use a combination of year-end and beginning-of-year limits. For 415 benefit limits, use the limit in effect at the end of your plan year. (However, limits to a participant’s elective deferrals are always based on the calendar year.) When calculating maximum compensation limits, or determining who is a highly compensated employee or a key employee, use the limit in effect at the beginning of your plan year (and see the note below for more information on HCEs).

** Remember that highly compensated employees (“HCEs”) are determined based on their compensation in a “look-back year,” not the current year. For calendar year plans, the previous calendar year is the “look-back year.” This means that in 2019, highly compensated status is based on the 2018 limit of $120,000.  For fiscal year plans, the “look-back year” will either be the previous plan year or, if elected on a consistent basis for all of an employer’s plans, the calendar year ending in the current plan year.

*** This fringe benefit is for transit passes, qualified parking, and transportation in a commuter highway vehicle. The TCJA suspending the reimbursement tax benefit for bicycle commuting costs until December 31, 2025. The Tax Cuts and Jobs Act (“TCJA”) expressly prohibits for-profit employers from deducting the costs of these benefits, and for tax-exempt employers, amounts contributed to these benefits will be subject to the Unrelated Business Income Tax. The TCJA still allows the benefit to be tax-free to employees, up to the IRS limit.

 

You can find these and other deferred compensation limits for 2019 in IRS Notice 2018-83, and in this announcement from the Social Security Administration. To see how these numbers have progressed over time, check out this link.