Yearly limits for deferred compensation.  Deferred compensation: voluntary contributions to a savings plan designed for retirement income; usually exempt from FIT and SIT, depending upon state regulations; includes Internal Revenue Codes 401(k), 403(b), 408(k)(6), 457(b), 501(c) and SIMPLE IRA.

Employee Limits

2020

* There is a special catch-up election for employees who have completed at least 15 years of service with a qualified organization. Such employees are able to contribute an additional $3,000 annually, which brings the limit to $22,000 (<50) or $28,000.00. (>50).  See Retirement Plans FAQs regarding 403(b) Tax-Sheltered Annuity Plans for additional details.

** Special rules may apply depending on the type of entity and how close the employee is to retirement.

*** IRS rules indicate a Roth 401(k) shares the annual limit with a 401(k) plan. A Roth 403(b) shares the annual limit with a 403(b).

See 401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500 for more information.

2019

* There is a special catch-up election for employees who have completed at least 15 years of service with a qualified organization. Such employees are able to contribute an additional $3,000 annually, which brings the limit to $22,000 (<50) or $28,000.00. (>50).  See Retirement Plans FAQs regarding 403(b) Tax-Sheltered Annuity Plans for additional details.

** Special rules may apply depending on the type of entity and how close the employee is to retirement.

*** IRS rules indicate a Roth 401(k) shares the annual limit with a 401(k) plan. A Roth 403(b) shares the annual limit with a 403(b).

See 401(k) contribution limit increases to $19,000 for 2019; IRA limit increases to $6,000 for more information.

2018

* There is a special catch-up election for employees who have completed at least 15 years of service with a qualified organization. Such employees are able to contribute an additional $3,000 annually, which brings the limit to $21,500 (<50) or $27,500.00. (>50).

** Special rules may apply depending on the type of entity and how close the employee is to retirement.

*** IRS rules indicate a Roth 401(k) shares the annual limit with a 401(k) plan. A Roth 403(b) shares the annual limit with a 403(b). IRS Announces 2018 Pension Plan Limitations

2015, 2016, & 2017

* There is a special catch-up election for employees who have completed at least 15 years of service with a qualified organization. Such employees are able to contribute an additional $3,000 annually, which brings the limit to $21,000 (<50) or $27,000.00. (>50).

** Special rules may apply depending on the type of entity and how close the employee is to retirement.

*** IRS rules indicate a Roth 401(k) shares the annual limit with a 401(k) plan. A Roth 403(b) shares the annual limit with a 403(b).

Company Contribution Limits

For company contribution limits, refer to IRS Retirement Topics - Contribution Limits or your plan sponsor.

Over-Contributing

• There are penalties and implications for over-contributing to retirement plans, tax filings, and W-2 corrections
• All corrections must be made by April 15th, otherwise, it is considered taxable income for the current year as well as the previous year and is subject to double taxation.
• The maximum amount that someone can contribute to retirement plans annually is per person and not by the employer.
• If an employee over contributes to their retirement plan, the retirement plan provider will send them a 1099R, which would get filed with their personal tax return.

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External Links

For additional information on Employee Limits and Employer (Company) contributions or matches see the IRS resource:

• 401(k) Resource Guide - Plan Participants - Limitation on Elective Deferrals.
• Roth Comparison Chart
• Retirement Topics - 403(b) Contribution Limits
• EPCU Completed Projects Projects with Summary Reports Invalid 501(c)(18) Deferral Project Report