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For tax year 2014, the IRS recently announced annual inflation adjustments for more than 40 tax provisions, including cost-of-living adjustments (COLA) applicable to dollar limitations for pension and other retirement plans for 2014. The increase in the 2014 limitations results from an increase in the cost-of-living index. The increases are as follows: 

  • The annual compensation limit increased to $260,000 ($5,000 increase from 2013) 
  • The defined contribution limit increased to $52,000 ($1,000 increase from 2013)
    The defined benefit limit increased to $210,000 ($5,000 increase from 2013)

    Some of the significant benefit plan limitations that remain unchanged include the highly compensated employee threshold, elective deferrals and catch-up contribution limitations.

    For more information or questions on this topic, please contact your local UHY LLP professional.