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IRS Announces 2015 ESOP Limits

The Internal Revenue Service has announced changes to the maximum compensation limit, 401(k) elective deferral limit and extended installments limit for 2015.

Maximum Compensation Limit

For plan years beginning in 2015, the maximum compensation under Internal Revenue Code Section 401 (a)(17) that can be taken into account for determining a participant’s allocations is $265,000.

401(k) Elective Deferral Limit

In 2015, the maximum 401(k) elective deferral limit under Internal Revenue Code Section 402 (g)(1) is $18,000.

Extended Installments Limit

In 2015, the dollar amount under Internal Revenue Code Section 409 (o)(1)(C)(ii) for determining the maximum account balance in an ESOP subject to a 5-year distribution period is $1,070,000. 

The dollar amount used to determine the lengthening of the 5-year distribution period is $210,000.