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Northwest OH Legal Blog

Friday, December 20, 2013

Internal Revenue Service Issues 2014 Cost-of-Living Adjustments for Retirement Plan Limits

On October 31, 2013, the Internal Revenue Service (“IRS”) announced cost-of-living adjustments to dollar limitations for items affecting tax-qualified retirement plans under the Internal Revenue Code (“Code”) in 2014.  The announcement includes the following highlights for 2014: 

  • The elective deferral (contribution) limit for employees who participate in section 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $17,500. 
  • The catch-up contribution limit for the above listed plans for employees aged 50 and over remains unchanged at $5,500.
  • The limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) is increased from $205,000 to $210,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2014 from $51,000 to 52,000.

The following table sets forth the Code limits applicable to 401(k) plans, profit sharing plans, and defined benefit plans for 2013, with a comparison to such limits for 2011 and 2012.

        
  

Limits under Applicable Code Section

  
  

2014

  
  

2013

  
  

2012

  

Annual Compensation - 401(a)(17)/404(l)

260,000

255,000

250,000

Elective Deferrals under 401(k) Plan - 402(g)(1)

17,500

17,500

17,000

Catch-Up Contributions under 401(k) Plan - 414(v)(2)(B)(i)

5,500

5,500

5,500

Annual Addition Limit for Defined Contribution Plans -   415(c)(1)(A)

52,000

51,000

50,000

Highly Compensated Employee Threshold - 414(q)(1)(B)

115,000

115,000

115,000

Annual Benefit Limit for Defined Benefit Plans - 415(b)(1)(A)

210,000

205,000

200,000

Key Employee Compensation Threshold - 416(i)(1)(A)(i)

170,000

165,000

165,000

Taxable Wage Base for Social Security Taxes

117,000

113,700

110,100

 


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