2018 Pension Plan Limitations Not Affected by Tax Reform, IRS Says
The recently enacted Tax Cuts and Jobs Act of 2017 (TCJA) will not affect 2018 pension plan limitations
, the IRS said
on Feb. 6 in IR-2018-19
The Internal Revenue Code specifies dollar limits on benefits and contributions under qualified retirement plans and requires the Treasury Department to adjust these limits annually based on changes to the cost of living. Those adjustments are to be made using procedures that are similar to those used to adjust benefit amounts under the Social Security Act.
The IRS says that since the TCJA does not make any changes to the section of the Code that addresses retirement plan benefits and contributions, the qualified retirement plan limitations and cost-of-living adjusments
(COLAs) for tax year 2018 it announced in Notice 2017-64
and issued on Oct. 19, 2017 remain unchanged.
The IRS also notes in IR-2018-19 that the Code also specifies that contribution limits for IRAs, as well as the income thresholds related to IRAs and the Saver’s Credit, are to be adjusted based on changes in the cost of living. And while the TCJA made some changes to how such COLAs are made, the IRS says, the amounts announced for 2018 are unchanged.