Internal Revenue Bulletin:  2006-48 

November 27, 2006 

Rev. Rul. 2006-60


Table of Contents

2007 covered compensation tables; permitted disparity. The covered compensation tables under section 401 of the Code for the year 2007 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 2007 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 2007 year the taxable wage base is $97,500.

The following tables provide covered compensation for 2007:

2007 COVERED COMPENSATION TABLE
CALENDAR YEAR OF BIRTH CALENDAR YEAR OF SOCIAL SECURITY RETIREMENT AGE 2007 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 51,348
1942 2008 53,820
1943 2009 56,232
1944 2010 58,608
1945 2011 60,960
1946 2012 63,276
1947 2013 65,556
1948 2014 67,680
1949 2015 69,732
1950 2016 71,664
1951 2017 73,524
1952 2018 75,300
1953 2019 77,004
1954 2020 78,660
1955 2022 81,780
1956 2023 83,280
1957 2024 84,684
1958 2025 86,004
1959 2026 87,264
1960 2027 88,464
1961 2028 89,604
1962 2029 90,660
1963 2030 91,704
1964 2031 92,700
1965 2032 93,612
1966 2033 94,440
1967 2034 95,160
1968 2035 95,760
1969 2036 96,252
1970 2037 96,612
1971 2038 96,912
1972 2039 97,188
1973 2040 97,404
1974 and later 2041 97,500
2007 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 57,000
1944 - 1945 60,000
1946 63,000
1947 66,000
1948 - 1949 69,000
1950 72,000
1951 - 1952 75,000
1953 - 1954 78,000
1955 81,000
1956 - 1957 84,000
1958 - 1960 87,000
1961 - 1962 90,000
1963 - 1966 93,000
1967 - 1970 96,000
1971 and later 97,500

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 877-829-5500, between the hours of 8:30 a.m. and 4:30 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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