20 February 2025 Puerto Rico's Treasury Department announces qualified retirement plan limits for 2025 - Circular Letter 25-01 outlines updates to qualified retirement plans under the Puerto Rico Internal Revenue Code. The changes are effective January 1, 2025.
- The defined benefit plan limit increased from $275,000 to $280,000.
- The defined contribution plan limit increased from $69,000 to $70,000.
- Taxpayers should consider reviewing their contributions in light of the new limits.
| |
In Circular Letter 25-01, 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, 2025. 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, 2025, were released by the IRS in Notice 2024-80. See Tax Alert 2024-2075 for further details. The following table shows the plan limitations for 2025, some of which slightly increased from those applicable for 2024: Description | 2024 limit | 2025 limit | Defined benefit plan limit for annual benefits PR Code Section 1081.01(a)(11)(A)(i) | $275,000 | $280,000 | Defined contribution plan limit for annual contributions PR Code Section 1081.01(a)(11)(B)(i) | $69,000 | $70,000 | Annual limit on compensation PR Code Section 1081.01(a)(12) | $345,000 | $350,000 | Highly-compensated-employee-dollar threshold PR Code Section 1081.01(d)(3)(E)(iii)(III) | $155,000 | $160,000 | Deferral limit — dual qualified plans & federal government retirement plan1 PR Code Section 1081.01(d)(7)(A)(ii) | $23,000 | $23,500 | Dollar limitation for catch-up contributions for participants of federal government retirement plans PR Code Section 1081.01(d)(7)(C)(v) | $7,500 | $7,500 | Deferral limit — PR-only qualified plans 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 |
| * * * * * * * * * * |
Endnote1 The limit is $20,000 when the employee also contributes to an IRA. | | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: State and Local Taxation Group Workforce Tax Services - Employment Tax Advisory Services | | Published by NTD’s Tax Technical Knowledge Services group; Jennifer Mannetta, legal editor |
Document ID: 2025-0526 |
