Compliance November 6, 2019

IRS Announces 2020 Contribution and Benefit Limits

The contribution limit for employees who participate in 401(k), 403(b) and most 457 plans is increased from $19,000 to $19,500.

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The IRS has announced contribution and benefit limits for 2020.

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.

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The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500.

The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.

The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, up from $64,000; $48,750 for heads of household, up from $48,000; and $32,500 for singles and married individuals filing separately, up from $32,000.

Other limits included in IRS Notice 2019-59 include:

  • Effective January 1, 2020, the limitation on the annual benefit under a defined benefit (DB) plan under § 415(b)(1)(A) is increased from $225,000 to $230,000.
  • The limitation for defined contribution (DC) plans under § 415(c)(1)(A) is increased in 2020 from $56,000 to  $57,000.
  • The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and408(k)(6)(D)(ii) is increased from $280,000 to $285,000.
  • The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $180,000 to $185,000.
  • The limitation used in the definition of “highly compensated employee” under§ 414(q)(1)(B) is increased from $125,000 to $130,000.
Break from the Grind November 5, 2019

Employees Are Making Each Other Sick

Having too much work to do and feeling pressure from employers are some reasons employees report coming into work while under the weather.

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Ninety percent of employees admitted in a survey from Accountemps they’ve at least sometimes come to the office with cold or flu symptoms.

Of those respondents, 33% indicated they always go to work even when they’re under the weather. More employees ages 25 to 40 (39%) reported always coming to work sick than respondents ages 18 to 24, 55 and older (27% each) and ages 41 to 54 (26%).

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More than half (54%) of respondents said they go into work sick because they have too much work to do, 40% don’t want to use a sick day, and 34% reported they feel pressure from their employers to come into work.

“Staying home when you’ve got a cold or the flu is the best way to avoid spreading germs to others and fight the illness faster,” says Michael Steinitz, senior executive director of Accountemps, a division of Robert Half. “Bosses should set an example by taking time off when they’re under the weather, encouraging employees to do the same and offering those with minor ailments the ability to work from home.”

The survey included responses from 2,800 workers ages 18 and older and employed in office environments in 28 U.S. cities.

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