Revenue Ruling 2002-63

This revenue ruling provides tables of covered compensation under section 401(l)(5)(E) of the Internal Revenue Code (the "Code") and the Income Tax Regulations, thereunder, for the 2003 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) 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) of the Income Tax Regulations 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 2003 year, the taxable wage base is $87,000.

The following tables provide covered compensation for 2003:

                  2003 COVERED COMPENSATION TABLE

 CALENDAR          CALENDAR YEAR OF         2003 COVERED
  YEAR OF           SOCIAL SECURITY         COMPENSATION
   BIRTH             RETIREMENT AGE           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                    43,968
    1939                2005                    46,236
    1940                2006                    48,492
    1941                2007                    50,724
    1942                2008                    52,908
    1943                2009                    55,008
    1944                2010                    57,096
    1945                2011                    59,148
    1946                2012                    61,152
    1947                2013                    63,132
    1948                2014                    64,968
    1949                2015                    66,720
    1950                2016                    68,352
    1951                2017                    69,912
    1952                2018                    71,376
    1953                2019                    72,780
    1954                2020                    74,136
    1955                2022                    76,656
    1956                2023                    77,856
    1957                2024                    78,972
    1958                2025                    79,992
    1959                2026                    80,952
    1960                2027                    81,852

                  2003 COVERED COMPENSATION TABLE

CALENDAR            CALENDAR YEAR OF         2003 COVERED
YEAR OF             SOCIAL SECURITY         COMPENSATION
 BIRTH               RETIREMENT AGE           TABLE II

    1961                2028                    82,692
    1962                2029                    83,448
    1963                2030                    84,180
    1964                2031                    84,876
    1965                2032                    85,500
    1966                2033                    86,028
    1967                2034                    86,436
    1968                2035                    86,748
    1969                2036                    86,940
1970 or later           2037                    87,000

                       2003 ROUNDED COVERED
                        COMPENSATION TABLE

 YEAR OF BIRTH                         COVERED
                                     COMPENSATION

    1937                               39,000
    1938-1939                          45,000
    1940                               48,000
    1941                               51,000
    1942-1943                          54,000
    1944                               57,000
    1945-1946                          60,000
    1947                               63,000
    1949-1949                          66,000
    1950-1951                          69,000
    1952-1953                          72,000
    1954                               75,000
    1955-1957                          78,000
    1958-1960                          81,000
    1961-1964                          84,000
    1965 and later                     87,000

The principal author of this revenue ruling is Todd Newman of Employee Plans Customer Education and Outreach of the 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. Newman's number is (202) 283-9702 (not a toll-free number).

---

Official location: 2002-45 I.R.B. 803 (Nov. 12, 2002)
Online at http://www.irs.gov/pub/irs-irbs/irb02-45.pdf