As required by Section 1081.01(h) of the Puerto Rico Internal Revenue Code of 2011, as amended (the “PR Code”), the Puerto Rico Treasury Department recently issued Circular Letter of Internal Revenue No. 25-01 with the applicable 2025 dollar limits for Puerto Rico qualified retirement plans, following the recent announcement by the Internal Revenue Service (“IRS”) in IRS Notice 2024-80 with respect to United States tax qualified retirement plans. The Puerto Rico limitations are generally applicable to tax-qualified plans under Section 1081.01 of the PR Code. Some of the key limits for tax years 2024 and 2025 are as follows with changes highlighted in yellow:
| 2024 | 2025 | |
| Annual Benefit Limitation for Defined Benefit Plans | $275,000 | $280,000 |
| Annual Contribution Limitation for Defined Contribution Plans | $69,000 | $70,000 |
| Annual Compensation Limit | $345,000 | $350,000 |
| Highly Compensated Employee Threshold | $155,000 * | $160,000 * |
| Elective Deferrals – Puerto Rico Only Qualified Plans | $15,000 | $15,000 |
| Catch-up Contribution – PR and Dual Qualified plans with cash or deferred arrangements | $1,500 | $1,500 |
| Elective Deferrals Limit – Dual Qualified Plans and Federal Government Thrift Savings Plan | $20,000 | $20,000 |
| Catch‐up Contributions – Federal Government Thrift Savings Plan | $7,500 | $7,500 |
| Voluntary (i.e., after-tax) Contribution Limitation | 10% of Compensation since being plan participant | 10% of Compensation since being plan participant |
(*) This is the limit that must be used when determining whether an employee is highly compensated (“HCE”) for the base year or the 12-month period preceding the plan year of testing (2024 for year 2025 testing, and 2025 for 2026 testing) in the case of calendar year plans. For example, an employee would be considered a HCE in the 2025 plan year if earned more than $155,000 in 2024, and a HCE in the 2026 plan year if earned more than $160,000 in 2025.
This document has been prepared for information purposes only and is not intended as and should not be relied upon as legal advice. If you have any questions or comments about the matters discussed in this notice, wish to obtain more information related thereto, or about its possible effect(s) on policy or operational matters, please contact us.