15 January 2019 Puerto Rico's Treasury Department announces qualified retirement plan limits for 2019 In Circular Letter 18-21, Puerto Rico's Treasury Department (PRTD) has announced the benefits and contribution limits for qualified retirement plans under Section 1081.01(a) of the Puerto Rico Internal Revenue Code of 2011, as amended (the PR Code), for tax years beginning on or after January 1, 2019. Section 1081.01(h) of the PR Code requires the PRTD to report the applicable limits that are announced by the US Internal Revenue Service (IRS) and will apply to plans qualified under the PR Code. The dollar limitations for qualified retirement and certain non-qualified plans that became effective January 1, 2019, were released by the IRS in Notice 2018-83. See Tax Alert 2018-2190 for further details. The following table shows the plan limitations for 2019, some of which slightly increased from those applicable for 2018: Description | 2018 Limit | 2019 Limit | Defined benefit plan limit for annual benefits PR Code Section 1081.01(a)(11)(A)(i) | $220,000 | $225,000 | Defined contribution plan limit for annual contributions PR Code Section 1081.01(a)(11)(B)(i) | $55,000 | $56,000 | Annual limit on compensation PR Code Section 1081.01(a)(12) | $275,000 | $280,000 | Highly compensated employee dollar threshold PR Code Section 1081.01(d)(3)(E)(iii)(III) | $120,000 | $125,000 | Deferral limit — dual qualified plans1 & federal government retirement plan PR Code Section 1081.01(d)(7)(A)(ii) | $18,500 | $19,000 | Dollar limitation for catch-up contributions for participants of federal government retirement plans PR Code Section 1081.01(d)(7)(C)(v) | $6,000 | $6,000 | Deferral Limit — PR only qualified plans2 PR Code Section 1081.01(d)(7)(A)(i) | $15,000 | $15,000 | Dollar limitation for catch-up contributions for participants of PR only and dual qualified retirement plans PR Code Section 1081.01(d)(7)(C)(i) | $1,500 | $1,500 | Participant after-tax contribution limit PR Code Section 1081.01(a)(15) | 10% of participant's aggregate compensation for all years of participation in the plan | 10% of participant's aggregate compensation for all years of participation in the plan |
Plan sponsors and / or record-keepers of dual qualified plans and Puerto Rico-only qualified plans need to be aware of these limits to timely reflect the appropriate limitations in their systems for tax years beginning on or after January 1, 2019, and to properly assess and comply with applicable withholding and reporting obligations resulting from distributions from those plans. Contact Information
For additional information concerning this Alert, please contact:
| State and Local Taxation Group | | • Pablo Hymovitz | (787) 772-7119 | | • Rosa M. Rodríguez | (787) 772-7062 | | • Pedro Mercado-Reyes | (787) 772-7177 |
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Document ID: 2019-0135 |
