Internal Revenue Bulletin:  2005-46 

November 14, 2005 

Rev. Rul. 2005-72


Table of Contents

2006 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2006 are provided for use in determining contributions to defined benefit plans and permitted disparity.

This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code (the “Code”) and the Income Tax Regulations, thereunder, for the 2006 plan year.

Section 401(l)(5)(E)(i) defines covered compensation with respect to an employee, as the average of the contribution and benefit bases in effect under section 230 of the Social Security Act (the "Act") for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

Section 401(l)(5)(E)(ii) of the Code states that the determination for any year preceding the year in which the employee attains social security retirement age shall be made by assuming that there is no increase in covered compensation after the determination year and before the employee attains social security retirement age.

Section 1.401(l)-1(c)(34) defines the taxable wage base as the contribution and benefit base under section 230 of the Act.

Section 1.401(l)-1(c)(7)(i) defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all individuals regardless of the year of birth of the individual. In determining an employee’s covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee’s covered compensation for a plan year beginning after the 35-year period applicable under §1.401(l)-1(c)(7)(i) is the employee’s covered compensation for a plan year during which the 35-year period ends. An employee’s covered compensation for a plan year beginning before the 35-year period applicable under §1.401(l)-1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year.

Section 1.401(l)-1(c)(7)(ii) provides that, for purposes of determining the amount of an employee’s covered compensation under §1.401(l)-1(c)(7)(i), a plan may use tables, provided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth.

For purposes of determining covered compensation for the 2006 year, the taxable wage base is $94,200.

The following tables provide covered compensation for 2006:

2006 COVERED COMPENSATION TABLE
CALENDAR YEAR OF BIRTH CALENDAR YEAR OF SOCIAL SECURITY RETIREMENT AGE 2006 COVERED COMPENSATION TABLE II
1907 1972 $4,488
1908 1973 4,704
1909 1974 5,004
1910 1975 5,316
1911 1976 5,664
1912 1977 6,060
1913 1978 6,480
1914 1979 7,044
1915 1980 7,692
1916 1981 8,460
1917 1982 9,300
1918 1983 10,236
1919 1984 11,232
1920 1985 12,276
1921 1986 13,368
1922 1987 14,520
1923 1988 15,708
1924 1989 16,968
1925 1990 18,312
1926 1991 19,728
1927 1992 21,192
1928 1993 22,716
1929 1994 24,312
1930 1995 25,920
1931 1996 27,576
1932 1997 29,304
1933 1998 31,128
1934 1999 33,060
1935 2000 35,100
1936 2001 37,212
1937 2002 39,444
1938 2004 43,992
1939 2005 46,344
1940 2006 48,816
1941 2007 51,252
1942 2008 53,628
1943 2009 55,944
1944 2010 58,236
1945 2011 60,492
1946 2012 62,712
1947 2013 64,896
1948 2014 66,936
1949 2015 68,880
1950 2016 70,728
1951 2017 72,492
1952 2018 74,160
1953 2019 75,780
1954 2020 77,340
1955 2022 80,268
1956 2023 81,672
1957 2024 82,992
1958 2025 84,216
1959 2026 85,380
1960 2027 86,484
1961 2028 87,540
1962 2029 88,500
1963 2030 89,436
1964 2031 90,336
1965 2032 91,164
1966 2033 91,896
1967 2034 92,520
1968 2035 93,024
1969 2036 93,420
1970 2037 93,684
1971 2038 93,900
1972 2039 94,080
1973 and later 2040 94,200
2006 Rounded Covered Compensation Table
  Year of Birth Covered Compensation
  1937 39,000
  1938-1939 45,000
  1940 48,000
  1941 51,000
  1942 54,000
  1943-1944 57,000
  1945 60,000
  1946 63,000
  1947-1948 66,000
  1949 69,000
  1950-1951 72,000
  1952-1953 75,000
  1954 78,000
  1955-1956 81,000
  1957-1959 84,000
  1960-1961 87,000
  1962-1965 90,000
  1966-1969 93,000
  1970 and later 94,200

Drafting Information

The principal author of this revenue ruling is Lawrence Isaacs of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this revenue ruling, please contact the Employee Plans taxpayer assistance telephone service at 1-877-829-5500, between the hours of 8:00 a.m. and 6:30 p.m. Eastern time, Monday through Friday (a toll-free number). Mr. Isaacs’s telephone number is (202) 283-9710 (not a toll-free number).


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