The IRS announced November 1st the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The “all sources” maximum contribution (employer and employee combined) rises to $56,000, up $1,000. See IRS Announcement.
Health Savings Account (HSA) allowable contributions for participants with self-only health coverage will rise by $50. For HSAs linked to family coverage, the 2019 contribution limit will rise by $100 above the family cap set for 2018.
For 2019 the Flexible Spending Accounts (FSA) contribution limits will increase by $50.00, going from $2,650 to $2,700. The increased contribution limit affects health FSAs and limited purpose FSAs. See Revenue Procedure 2018-57.
The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
HR and payroll managers should plan to adjust their systems for the new year and to inform employees about the new limits in year-end open enrollment materials. Normally, the IRS announces annual limits in October. Because the IRS announced the 2019 contribution changes so close to the beginning of the fall open enrollment period, many plan sponsors may need to provide addendums to benefits materials that have already been printed.
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