COLA 2019: Cost-of-Living Adjustments

TRI-AD presents the Cost-of-Living Adjustments (COLAs) for 2019. These limits are provided each year by the Internal Revenue Service and are effective as of January 1, 2019.

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Retirement Cost-of-Living Adjustments
Maximum Dollar Limitations

Employee Deferral Limits

2019

2018 2017 2016

2015

401(k) Contribution

$19,000

18,500 18,000 18,000 18,000
403(b) Contribution

$19,000

18,500 18,000 18,000 18,000

457 Contribution

$19,000 18,500 18,000 18,000

18,000

SIMPLE 401(k)/IRA

$13,000 12,500 12,500 12,500

12,500

Employee Catch-Up Limits

401(k), 403(b), 457

$6,000 6,000 6,000 6,000 6,000

SIMPLE 401(k)/IRA

$3,000 3,000 3,000 3,000

3,000

Other Plan Limitations
Compensation Cap

$280,000

275,000 270,000 265,000 265,000
Defined Benefit Plan Maximum Benefit

$225,000

220,000 215,000 210,000

210,000

Defined Contribution Plan Maximum Contribution

$56,000

55,000 54,000 53,000

53,000

Highly Compensated Employees’ Compensation Exceeding

$125,000

120,000 120,000 120,000

120,000

Key Employee Officer Compensation

$180,000

175,000 175,000 170,000

170,000

Key Employee 1% Owner

$150,000

150,000 150,000 150,000

150,000

SEP Participation Coverage Compensation Level

$600

600 600 600

600

ESOP Threshold for 5-Year Distribution Period

$1,130,000

1,105,000 1,080,000 1,070,000

1,070,000

ESOP Incremental Threshold for Extending 5-Year Distribution Period (max 5 additional years)

$225,000 220,000 215,000 210,000

210,000

Social Security Taxable Wage Bases
– Social Security

$132,900

128,400 127,200 118,500

118,500

– Medicare

No Limit

No Limit No Limit No Limit

No Limit

Social Security Tax Rates By Percentage
– Social Security – Employer

6.20

6.20 6.20 6.20

6.20

– Social Security – Employee

6.20

6.20 6.20 6.20

6.20

– Medicare – Employer and Employee

1.45

1.45 1.45 1.45

1.45

– Per Employer/Per Employee Combined Rate

7.65

7.65 7.65 7.65

7.65

Combined Rate

15.30

15.30 15.30 15.30

15.30

Additional Medicare Tax on Wages above $200,000 – Employee Only

.9*

.9* .9* .9*

.9*

*The Affordable Care Act imposes an additional .9% Medicare tax on wages above $200,000 ($250,000 for married couples filing jointly, $125,000 for married couples filing separately and $200,000 for other filers). Employers are required to withhold the additional .9% Medicare tax (a total of 2.35%) on wages above $200,000 regardless of the employee’s tax filing status. Employers do not match this additional tax.

Health & Welfare Cost-of-Living Adjustments
Maximum Dollar Limitations

Health Care Reimbursement Accounts in a Cafeteria Plan

2019

2018 2017

2016

Maximum Contribution

$2,700

2,650 2,600

2,550

Dependent Care Reimbursement Accounts in a Cafeteria Plan
Maximum Contribution

$5,000

5,000 5,000

5,000

Maximum Contribution if Married Filing Separately

$2,500

2,500 2,500

2,500

Dependent Care Tax Credit on Personal Tax Return1
1 Qualifying Individual

$3,000

3,000 3,000

3,000

2 or more Qualifying Individuals

$6,000

6,000 6,000

6,000

Qualified Relative Income Allowance
Maximum Amount a qualified relative can earn and still be considered a dependent for tax purposes

$4,200

4,150 4,050

4,050

Qualified Transportation Plan
Parking – Monthly Limit

$265

260 255

255

Transit Passes and Vanpooling (Combined) – Monthly Limit

$265

260 255

255

Bicycle benefit (Employer-funded) – Monthly Limit

$20

20 20

20

Adoption Assistance Program2
Maximum Exclusion for Employer-Provided Program3

$14,080

13,810 13,570

13,460

Adoption Tax Credit Limit

$14,080

13,810 13,570

13,460

Modified Adjusted Gross Income Limits for Employer-Provided
Adoption Assistance Program and Tax Credit

Full credit if adjusted gross income below

$211,160

207,140 203,540

201,920

Phased credit if adjusted gross income between

$211,160–
$251,160

207,140–
247,140
203,540–
243,540

201,920–
-241,920

No credit allowed for adjusted gross income above

$251,160

247,140 243,540

241,920

Educational Assistance Programs
Maximum nontaxable educational assistance benefit

$5,250

5,250 5,250

5,250

Health Savings Accounts

Contribution Limit per Individual

$3,500

3,450 3,400

3,350

Contribution Limit per Family

$7,000

6,900 6,750

6,750

Catch-up Contribution for Age 55 and Older

$1,000

1,000 1,000

1,000

Out-of-pocket Maximum per Individual

$6,750

6,650 6,550

6,550

Out-of-pocket Maximum per Family

$13,500

13,300 13,100

13,100

Minimum Deductible per Individual

$1,350

1,350 1,300

1,300

Minimum Deductible per Family

$2,700

2,700 2,600

2,600

Highly Compensated Employee Compensation Exceeding

$125,000

120,000 120,000

120,000

Key Employee Officer Compensation

$180,000

175,000 175,000

170,000

Key Employee 1% Owner

$150,000

150,000 150,000

150,000

1 Credit may be adjusted based on the level of the taxpayer’s adjusted gross income and is reduced by amounts excluded from income under a Dependent Care Reimbursement Account plan sponsored by an employer.
2 An employer-sponsored Adoption Assistance Program may be a stand-alone program or contained in a Cafeteria Plan.
3 If employer-sponsored Adoption Assistance Program is contained in a Cafeteria Plan, this is the maximum limit within the plan year.