IRS Hikes DC, Catch-Up Limits

An IRS news release said the limit governing 401(k) plans, the federal government’s Thrift Savings Plan (TSP), and other similar programs—provided for by Section 402(g)(1)—increased from $15,500 to $16,500. The limit for defined contribution plans under Section 415(c)(1)(A) increased from $46,000 to $49,000.

Other 2009 limits detailed in the IRS announcement include:

• The annual benefit limitation for a defined benefit plan under Section 415(b)(1)(A) increased from $185,000 to $195,000. For participants who separated from service before January 1, 2009, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2008, by 1.0530.
• The adjusted gross income limitation under Section 25B(b)(1)(A) for figuring the retirement savings contributioncredit for taxpayers filing as head of household increased from $24,000 to $24,750. Meanwhile, the limitation under Section 25B(b)(1)(B) increased from $25,875 to $27,000; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D), from $39,750 to $41,625.
• The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers increased from $16,000 to $16,500; the limitation under Section 25B(b)(1)(B) increased from $17,250 to $18,000; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D), from $26,500 to $27,750.
• The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing a joint return increased from $32,000 to $33,000. The limitation under Section 25B(b)(1)(B) increased from $34,500 to $36,000;and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D), from $53,000 to $55,500.
• The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) increased from $85,000 to $89,000. Meanwhile, the applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) increased from $53,000 to $55,000. The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant, but whose spouse is an active participant, increased from $159,000 to $166,000.
• The adjusted gross income limitation under Section 408A(c)(3)(C)(ii)(I) for determining the maximum Roth IRA contribution for taxpayers filing a joint return or as a qualifying widow(er) increased from $159,000 to $166,000. The adjusted gross income limitation under Section 408A(c)(3)(C)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) increased from $101,000 to $105,000.

More information from the IRS is available here.

A table charting the IRS limits from 2000 through 2009 is available here.

Also Thursday, the Social Security Administration (SSA) announced higher Social Security taxes for 2009 (see SSA Announces Higher Social Security Taxes).