Retirement Plan Contribution Limits Increased for 2019
401(k) Contribution Limit Increased to $19,000
The IRS has announced that the amounts employees can contribute to 401(k)s and IRAs will increase in 2019. In particular:
- The employee contribution limit for 401(k) plans will be $19,000, up from $18,500 in 2018. The catch-up contribution limit for employees aged 50 and over remains unchanged at $6,000.
- The employee contribution limit for IRAs will be $6,000, up from $5,500 in 2018. The catch-up contribution limit for employees aged 50 and over remains unchanged at $1,000.
- The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will be $13,000, up from $12,500 in 2018. The catch-up contribution limit for employees aged 50 and over remains unchanged at $3,000.
Earnings Subject to Social Security Tax to Increase in 2019
Taxable Earnings to Increase to $132,900
The Social Security Administration has announced that, effective January 1, 2019, the maximum amount of earnings subject to the Social Security tax will increase to $132,900, up from $128,400 in 2018. As a reminder, both employers and employees pay a 6.2% Social Security tax on an employee’s earnings, up to the maximum amount of earnings subject to the tax each year.
Standard Mileage Rate to Increase in 2019
Rate to Increase to 58 Cents Per Mile
The Internal Revenue Service has announced that the optional standard mileage rate used to calculate the costs of operating a car, van, pickup truck, or panel truck for business purposes in 2019 will be 58 cents per mile, up from 54.5 cents per mile in 2018. The 2019 rates for automobiles used for charitable, medical, or moving purposes were also announced. For more information, please read IRS Notice 2019-02.
New York State Increases Employee-Paid Premium Rate for Paid Family Leave
Annual Cap Also Increased
New York State has increased the employee-paid premium rate and annual cap under its Paid Family Leave (PFL) law for 2019. Effective January 1, 2019, to cover the costs of their PFL insurance premiums, employers may deduct .153% of an employee’s weekly wage until the annual cap of $107.97 is reached. Currently, employers may deduct .126% of an employee’s weekly wage until the annual cap of $85.56 is reached.
New York State Minimum Wage Increases to $11.10 per hour beginning 12/31/2018
New York State minimum wage is set to increase at the end of the calendar year from $10.40 to $11.10 per hour in the new year. Annual increases for the rest of the state will continue until the rate reaches $15 minimum wage.
ACA Remains in Effect After Court Rules Law Unconstitutional
Further Legal Developments Expected
A federal district court in Texas has ruled the entirety of the Affordable Care Act (ACA) unconstitutional. However, the decision is expected to be swiftly appealed. In the meantime, pending further legal developments, the ACA remains in effect.
IRS Moves Back Furnishing Deadlines for Forms 1095-C and 1095-B
Furnishing Deadline Moved to March 4
The IRS has moved back the deadlines by which employers must furnish Forms 1095-C and 1095-B in early 2019. As a result:
- Employers with 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-C to all full-time employees no later than March 4, 2019.
- Self-insured employers with fewer than 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-B to all responsible individuals—typically the primary insured, an employee or former employee, or other related person named on the application for insurance—no later than March 4, 2019.
The deadline for employers to file all Forms 1094 and 1095 with the IRS remains February 28, 2019 (or April 1, 2019, if filing electronically).