IRS: Retirement plan contribution limits remain in place

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), or 457(b) plans, and the federal government’s Thrift Savings Plan, remains unchanged at $16,500 for tax year 2011, announced the Internal Revenue Service.

The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500.

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in an employer-sponsored retirement plan and have modified adjusted gross incomes between $56,000 and $66,000, which is unchanged from 2010.

For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000.

For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $169,000 and $179,000, up from $167,000 and $177,000.

The AGI (adjusted gross income) phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to 179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010.

For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000. For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.

The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.


WebCPA is an online publication of SourceMedia.Follow EBN on: Twitter | Facebook | LinkedIn | Podcasts

For reprint and licensing requests for this article, click here.
MORE FROM EMPLOYEE BENEFIT NEWS