The Internal Revenue Service said the cost-of-living adjustments affecting the dollar limitations for pension plans and other retirement- related items for tax year 2011 will mostly remain unchanged, except for a few small inflation adjustments.
The announcement follows on the heels of the Social Security Administration announcing that for the second year in a row, the COLA for retirees will remain unchanged, due to the low rate of inflation (see No Social Security Cost-of-Living Adjustment in 2011).
The IRS said the the elective deferral (contribution) limit for employees who participate in 401(k), 403(b), or 457(b) plans, and the federal governments Thrift Savings Plan, remains unchanged at $16,500.
The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500.
The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in an employer-sponsored retirement plan and have modified adjusted gross incomes between $56,000 and $66,000, which is unchanged from 2010.
For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000. For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the deduction is phased out if the couples income is between $169,000 and $179,000, up from $167,000 and $177,000.
The AGI phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to $179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010. For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000. For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.
The AGI limit for the savers credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.
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