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401(k) Contribution Limits and Deadlines for 2019 & 2020

Table of Content

Last updated on March 3rd, 2020
Written by: Rick Pendykoski

1. 401(K) Contributions and Deadlines

401(k) Contribution Deadlines

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

401(k), 403(b) and 457 Plan Contribution Limits for 2019 and 2020

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

 

Defined Contribution Plan Limits 2020 2019 Change
Elective contributions for all eligible workers $19,500 $19,000 +$500
Catch-up contributions for workers 50 and over $6,500 $6,000 +$500
Defined contribution maximum from all sources for workers under 50 $57,000 $56,000 +$1000
Defined contribution maximum from all sources for workers 50 and over $63,500 $62,000 +$1500
Employee compensation limit for calculating contributions $285,000 $280,000 +$5,000
Key employees’ compensation threshold for nondiscrimination test testing $185,000 $180,000 +5,000
Highly compensated employees’ threshold for nondiscrimination testing* $130,000 $125,000 +5,000

 

* 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 and Deadlines

Solo 401k Contribution Limits

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.

 

2019 2020
Maximum elective deferral $19,000 $19,500
Catch-up contribution for age 50 or older $6,000 $6500


2. Profit sharing also known as Employer Contribution.

 

2019 2020
Maximum employer contribution $56,000 $57,000
Catch-up contribution for age 50 or older $6,000 $6500

 

Important note: For 2019, if the business owner decides to take full elective deferral of $19,000, then he/she is limited to making only $37,000 in profit-sharing contributions, thus ensuring that the total contribution does not exceed $56,000.

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.