In Notice 2019-59, the IRS highlighted the following adjustments taking effect on Jan. 1, 2020, for 401(k), 403(b) and most 457 plans:
| Defined Contribution Plan Limits | 2020 | 2019 | Change |
| Maximum employee elective deferral | $19,500 | $19,000 | +$500 |
| Employee catch-up contribution (if age 50 or older by year-end) ** | $6,500 | $6,000 | +$500 |
| Defined contribution maximum limit, all sources (employee + employer) | $57,000 | $56,000 | +$1,000 |
| Defined contribution maximum limit (if age 50 or older by year end); maximum contribution all sources plus catch-up | $63,500 | $62,000 | +$1,500 |
| Employee compensation limit for calculating contributions | $285,000 | $280,000 | +$5,000 |
| Key employees’ compensation threshold for nondiscrimination testing | $185,000 | $180,000 | +5,000 |
| Highly compensated employees’ threshold for nondiscrimination testing | $130,000 | $125,000 | +5,000 |
| **The $6,500 catch-up contribution limit for participants age 50 or older applies from the start of the year to those turning 50 at any time during the year.
Source: IRS Notice 2019-59. |
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