In guidance released Wednesday, the Internal Revenue Service said employees in 401(k) plans would be able to contribute as much as $19,500 in 2020.
Participants in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan will see that contribution increased from $19,000.
The catch-up contribution limit for employees 50 and older who participate in these plans will increase to $6,500 from $6,000.
The limitation regarding SIMPLE retirement accounts will increase from $13,000 for 2019 to $13,500 for 2020.
In addition, the guidance said income ranges that determine eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs and to claim the Saver’s Credit all increased for 2020.
According to the guidance, taxpayers can deduct contributions to a traditional IRA by meeting certain conditions. If the taxpayer or his or her spouse was covered by a retirement plan at work during the year, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income.