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Notice 2018-83: Pension plans, cost-of-living adjustments for 2019

Pension plans, cost-of-living adjustments for 2019

The IRS today released an advance version of Notice 2018-83 providing the dollar limitations for qualified retirement plans for tax year 2019.

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Changes for 2019

Notice 2018-83 [PDF 50 KB] and a related IRS release—IR-2018-211 (November 1, 2018)—note the following changes in amounts from 2018 to 2019 (the amounts for 2018 are shown in parenthesis):

  • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is $19,000 (up from $18,500).
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000 (up from $189,000 and $199,000). 
  • The adjusted gross income (AGI) phase-out range for taxpayers making contributions to a Roth IRA for married couples filing jointly is $193,000 to $203,000 (up from $189,000 to $199,000).  For single taxpayers and heads of household, the income phase-out range is $122,000 to $137,000 (up from $120,000 to $135,000).
  • The AGI limit for the saver’s credit—also known as the retirement savings contribution credit—for low- and moderate-income workers is $64,000 for married couples filing jointly (up from $63,000); $48,000 for heads of household (up from $47,250); and $32,000 for married individuals filing separately and for single taxpayers (up from $31,500).
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for those who have modified AGI within a certain range. For single taxpayers who are covered by a workplace retirement plan, the income phase-out range is increased to $64,000 to $74,000 (up from $63,000 to $73,000). For married couples filing jointly, when the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is increased to $103,000 to $123,000 (up from $101,000 to $121,000). For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The limit on annual contributions to an IRA, which last increased in 2013, is $6,000 (up from $5,500).

Unchanged limits for 2019

The limitations that remain unchanged for 2019, from 2018, include the following:

  • The catch-up contribution limit for employees age 50 years and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
  • The additional catch-up contribution limit to an IRA for individuals age 50 years and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The AGI phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

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