2010 IRS Maximum Allowed 401k Contribution Announced

2010 IRS Maximum Allowed 401k Contribution Announced

The following limits are in effect for years beginning 2009 and 2010.
The 401(k) deferral limit relates to the calendar year.

The new limits are as follows: 2009 2010

Compensation Considered for Plan Benefits
$ 245,000 $ 245,000

401(k) Elective Deferral Limit (pre-tax or Roth)
$ 16,500 $ 16,500

Catch-up Contributions for 401(k) Participants Over Age 50
$ 5,500 $ 5,500

Defined Benefit Annual Maximum Benefit
$ 195,000 $ 195,000

Defined Contribution Annual Maximum Allocation
$49,000 $ 49,000

Highly Compensated Employee Definitions:
5% Owner or Any Employee With Compensation in
Prior Year Over $110,000 $110,000*
(You may choose to limit this group to
top paid 20% of all employees if more than 20% of
employee shave earnings over the threshold amount)

Key Employee Compensation (officer)
$ 160,000 $ 160,000

Social Security Taxable Wage Base
$ 106,800 $106,800

*Because the Highly Compensated Employee definition uses prior year compensation, for the 2009 Plan Year, the Highly Compensated Employees include those with compensation over $105,000 in 2008. For the 2010 Plan Year, the Highly Compensated Employees include those with compensation over $110,000 in 2009. For 2011, the Highly Compensated Employees include those with Compensation over $110,000 in 2010.