The IRS has released the 2010 limits with little changes from 2009 because the Consumer Price Index remained flat over the past year.
Social Security Wage Base
The Social Security Wage Base remains at $106,800 for 2010. The maximum social security tax employees and employers will each pay is 2010 also remains at $6,621.60.
Qualified Transportation Fringes
The amounts that may be excluded from gross income for employer-provided "qualified transportation fringe benefits" remains unchanged from 2009. The 2010 limits are $230 per month for "qualified parking", and the "qualified transportation pass" is $230 per month.
NOTE: This is not an aggregate over several months as long as the YTD does not exceed $2,760. It is a monthly amount to be determined per month. In example, an employee has nothing reported in January, but wants to report $360 in February, the employee cannot do so. The employee can only report $230 per month in each month to meet the guidelines.
Pension Plan Limits
While the cost-of-living index actually decreased from 9-30-08 to 9-30-09, the IRS said that the 2010 limits will be the same as those in effect for 2009 [IR-2009-094, 10-15-09].
• The limitation on the exclusion for elective deferrals under §402(g)(1) (e.g., §401(k) and §403(b) plans) is unchanged at $16,500.
• The compensation amount under §408(p)(2)(E) regarding elective deferrals to SIMPLE retirement accounts is unchanged at $11,500.
• The limitation under §457(e)(15) concerning elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations (§457(b) plans) is unchanged at $16,500.
• The limitation under §416(i)(1)(A)(i) concerning the definition of "key employee" in a top-heavy plan is unchanged at $160,000.
• The limitation under §414(v)(2)(B)(i) for catch-up contributions to §§401(k), 403(b), and 457(b) plans for individuals age 50 or over is unchanged at $5,500.
• The limitation under §414(v)(2)(B)(ii) for catch-up contributions to an employer's SIMPLE plan for individuals age 50 or over remains unchanged at $2,500.
• The limitation used in the definition of "highly compensated employee" under §414(q)(1)(B) is unchanged at $110,000.
• The compensation amount under federal regulation §1.61-21(f)(5)(i), concerning the definition of "control employee" for fringe benefit purposes, is unchanged at $95,000. The compensation amount under §1.61-21(f)(5)(iii) is unchanged at $195,000.
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