On October 18, 2007, the Internal Revenue Service (“IRS”) announced the applicable dollar limitations for qualified plans and other items for the 2008 tax year. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. For 2008, some limits changed to adjust for cost of living changes, while others remained unchanged. Some key plan limits are noted below:
- The maximum elective deferral remains unchanged at $15,500.
- The defined contribution plan maximum deferral is increased from $45,000 to $46,000.
- The annual compensation limit is increased from $225,000 to $230,000.
- Maximum catch-up contribution for those over age 50 remains $5,000.
- The limitation used in the definition of highly compensated employee is increased from $100,000 to $105,000.