The IRS and the Social Security Administration have announced the cost-of-living adjustments for various benefit plan limits for 2010. Limits affecting retirement plans are shown directly below and the limits for health and certain other fringe benefit plans are shown on the following page.

Retirement Plan Limits

Last week, the Service provided updated retirement plan limits effective for the plan year that begins on or after January 1, 2010. Due to the low inflation rate in 2009, most limits did not receive their traditional cost-of-living adjustment. The 2010 limits, as well as the 2009 limits, are as follows: 

 

 2009

 2010

Maximum Elective Deferrals to §401(k), §403(b), and §457(b) Plans

 $16,500

 $16,500

Maximum Catch-up Elective Deferrals to Plans other than SIMPLE Plans (age 50 by the end of the year)

 $5,500

 $5,500

Section 415 Limits
Defined Contribution Plan Annual Addition Maximum
Defined Benefit Plan Dollar Maximum
Defined Benefit Plan Compensation Multiplier – Used to determine limit for 
    participants who separated from service prior to January 1, 2010

$49,000
$195,000
1.0530

$49,000
$195,000
1.0000 

 Annual Compensation Limit under §§401(a)(17), 404(l) and 408(k)
    Special limit for Governmental Plans in effect on July 1, 1993

 $245,000
$360,000

 $245,000
$360,000

§414(q) Highly Compensated Employee definition

$110,000

$110,000

§416(i) Top-Heavy Compensation – Used to determine officers as key employees

$160,000

$160,000

§409(o) Maximum ESOP Account Balance Subject to 5-Year Distribution Period

$985,000

$985,000

ESOP Amount Used to Determine Extensions of the 5-Year Distribution Period

$195,000

$195,000

SIMPLE Plans 
    Qualified Salary Reduction Limit under §408(p)
    §§401(k)(11) and 408(p) Catch-up Contributions (age 50 by end of year)

$11,500
$2,500

$11,500
$2,500

 §408A Maximum Roth IRA Contribution (AGI Limit)
    Married Filing Joint Return or Qualifying Widower
    All other Taxpayers (other than married filing separately)

 $166,000
$105,000

 $167,000
$105,000

Social Security Wage Base

The Social Security Administration has also published its new 2010 limit for the Social Security wage base. For the first year since 1975, the taxable wage base (tax rate 6.2%) remains unchanged at $106,800 in 2010.


Health and Fringe Benefit Plan Limits

The Service has also released health and fringe benefit plan adjustments effective January 1, 2010. The 2010 limits, as well as the 2009 limits, are as follows:

 

2009

2010

Health Savings Accounts – HDHP Limits (§223(c)(2)(A))
    HDHP Minimum Annual Deductible – Self Only
    HDHP Minimum Annual Deductible – Family
    HDHP Out-of-Pocket Maximum – Self Only
    HDHP Out-of-Pocket Maximum – Family


$1,150
$2,300
$5,800
$11,600


$1,200
$2,400
$5,950
$11,900

Health Savings Accounts – Maximum Contribution Limits (§223(b))
    Self Only
    Family
    Catch-Up Contributions (age 55 by the end of the year)


$3,000
$5,950
$1,000


$3,050
$6,150
$1,000

Medical Savings Accounts – Health Plan Limits (§220(c)(2)(A))
    Annual Deductible – Self Only
    Annual Deductible – Family
    Out-of-Pocket Maximum – Self Only
    Out-of-Pocket Maximum – Family


$2,000 to $3,000
$4,000 to $6,050
$4,000
$7,350


$2,000 to $3,000
$4,050 to $6,050
$4,050
$7,400

Medical Savings Accounts – Maximum Contribution Limits (§220(b)(2))
    Self Only (65% of deductible)
    Family (75% of deductible)


$1,300 to $1,950
$3,000 to $4,537


$1,300 to $1,950
$3,037 to $4,537

Transportation Fringe Benefits – Monthly Limits (§132(f)(2))
    Parking
    Transit Passes and Vanpooling (effective March 1, 2009)


$230
$230


$230
$230

Employer Adoption Assistance Exclusion (§137)
    Maximum Gross Income Exclusion
    Modified AGI Phase-out – Start
    Modified AGI Phase-out – End


$12,150
$182,180
$222,180


$12,170
$182,520
$222,520

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