Publication

02 November 2018

IRS Announces 2019 Annual Limits on Various Employee Benefits

The IRS recently released inflation-adjusted limitations that apply to various employee benefits in 2019.

Social Security Taxable Wage Base for 2019
The Social Security Administration recently announced that the maximum amount of earnings subject to Social Security tax is $132,900, which is an increase of $4,500 from 2018.

Retirement Plan Dollar Limitations for 2019
The Internal Revenue Service recently announced the dollar limits that apply to retirement plans during 2019. Here are some of the more important limits:

Elective Deferral Limit for 401(k), 403(b) and 457 Plans
2018 Limit: $18,500
2019 Limit: $19,000

Catch-Up Contribution Limit for 401(k), 403(b) and 457 Plans
2018 Limit: $6,000
2019 Limit: $6,000 (unchanged)

Maximum Compensation Limit for Qualified Retirement Plans
2018 Limit: $275,000
2019 Limit: $280,000

Annual Additions Limit for Defined Contribution Plans
2018 Limit: $55,000
2019 Limit: $56,000

Annual Benefit Limit for Defined Benefit Plans
2018 Limit: $220,000
2019 Limit: $225,000

Annual Compensation for Classification of Highly Compensated Employees
2018 Amount: $120,000
2019 Amount: $125,000

Note: An employee is a highly compensated employee (HCE) based upon the employee’s compensation during the prior plan year. Therefore, in determining whether an employee is an HCE for a plan year beginning during 2019, the participant’s compensation during the 2018 plan year and the compensation limit for the 2018 plan year are used.

Annual Compensation for Classification of a Key Employee
2018 Limit: $175,000
2019 Limit: $180,000

HSA Dollar Limitations for 2019
The Internal Revenue Service also recently announced increases in the dollar limits that apply to HSAs in 2019:

Annual HSA Contribution Limit
2018 Limit: $3,450 for self-only ($6,900 for family) HDHP coverage
2019 Limit: $3,500 for self-only ($7,000 for family) HDHP coverage

HSA Catch-Up Contribution Limit (for individuals age 55 or older)
2018 Limit: $1,000
2019 Limit: $1,000 (unchanged)

Minimum Annual HDHP Deductible
2018 Limit: $1,350 for self-only ($2,700 for family) HDHP coverage
2019 Limit: $1,350 for self-only ($2,700 for family) HDHP coverage (unchanged)

Maximum HDHP Out-of-Pocket Expense Limit
2018 Limit: $6,650 for self-only ($13,300 for family) HDHP coverage
2019 Limit: $6,750 for self-only ($13,500 for family) HDHP coverage

Medical FSA Limitation for 2019
As of the date this client alert was published, the Internal Revenue Service has not released the revised dollar limitation on employee salary reduction contributions to a medical FSA. For 2018, this dollar limitation was $2,650. For 2019, we project this limitation will be $2,700.

For more information on the above, or if you have any questions, please contact one of the Miller Johnson employee benefits attorneys.