IRSCOLA
returns
the IRS
Cost-Of-Living Adjustment for next tax year. The COLA is
calculated by comparing consumer prices for July, August, September with prices
in the same three months from the previous year. This is used by the Internal
Revenue Service to determine cost‑of‑living
adjustments affecting dollar limitations for pension plans and other
retirement-related items.
IRSCOLA for year 𝑥 is based on the
following formula:
|
Where 𝐶𝑃𝐼𝑦𝑒𝑎𝑟
is the “3rd quarter CPI” (sum of
the CPI-U for the months of July, August, and September) in the given year.
(September CPI is usual published around October 13.) Example: if the DeterminationYear is 2021, IRSCOLA is calculated using the 3rd quarter
CPI-U in 2021 divided by the 3rd quarter CPI-U in 2020,
and is used to determine the IRS limits for tax year 2022. |
Syntax
IRSCOLA (DeterminationYear)
|
Parameter Name |
Description |
|
DeterminationYear |
Year:
a 4 digit number. |