Celebrating Over 19 Years of Excellent Service
Call Today : (866) 639-0066
Call Today :
(866) 639-0066
Celebrating Over 14 Years of Excellent Service

401(k) Contribution Limits and Deadlines for 2020 & 2021

Table of Content

Last updated on May 27th, 2021
Written by: Rick Pendykoski

1. 401(K) Contributions Limits  and Deadlines for 2020 and 2021

401(k) Contribution Deadlines

  • Tax-year 2019 deadline is April 15th, 2020 (You may request an extension)
  • Tax-year 2020 deadline is May 17th, 2021 (You may request an extension)

401(k), 403(b) and 457 Plan Contribution Limits for 2020 and 2021

The chart below provides a breakdown of the rules and limits for defined contribution plans 401(k), 403(b), and most 457 plans

Here is the 403(b), 457 and 401(K) maximum contribution limit for the year 2020-2021.

Defined Contribution Plan Limits 2020 2021 Change
Elective contributions for all eligible workers $19,500 $19,500 no change
Catch-up contributions for workers 50 and over $6,500 $6,500 no change
Defined contribution maximum from all sources for workers under 50 $57,000 $58,000 +$1000
Defined contribution maximum from all sources for workers 50 and over $63,500 $64,500 +$1500
Employee compensation limit for calculating contributions $285,000 $290,000 +$5,000
Key employees’ compensation threshold for nondiscrimination test testing $180,000 $180,000 no change
Highly compensated employees’ threshold for nondiscrimination testing* $130,000 $130,000 no change

 

* For the 2020 plan year, an employee who earns more than $125,000 in 2019 is an HCE. For the 2021 plan year, an employee who earns more than $130,000 in 2020 is an HCE.

 

2. Solo 401k Contributions Limits and Deadlines for 2020 and 2021

Solo 401k Contribution Limits 2020-21

In Solo 401(k), the business owner is the employer and the employee. Thus, contributions to a Solo 401(k) can be made in both the capacities. Contributions to a Solo 401(k) consist of two types as follows:

1. Elective deferrals known as Employee Contributions.

 

2020 2021
Maximum elective deferral $19,500 $19,500
Catch-up contribution for age 50 or older $6,500 $6500


2. Profit sharing also known as Employer Contribution.

 

2020 2021
Maximum employer contribution $57,000 $58,000
Catch-up contribution for age 50 or older $6,500 $6500

 

Important note: For 2020, if the business owner decides to take the full $19,500 for the elective deferral, then he/she is limited to making only $37,500 in profit-sharing contributions, thus ensuring the contribution does not exceed $57,000.

For 2021, if the business owner decides to take the full $19,500 for the elective deferral, then he/she is limited to making only $38,500 in profit-sharing contributions, thus ensuring the contribution does not exceed $58,000.

 

Video on contribution limits for your self directed 401k by Tim Berry, IRA Attorney