Tag: Contribution limits

IRS Announces COLA Adjusted Retirement Plan Limitations for 2024

The Internal Revenue Service released Notice 2023-75 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024.

Highlights Affecting Plan Sponsors of Qualified Plans for 2024

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $22,500 to $23,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $150,000 to $155,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $265,000 to $275,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased from $66,000 to $69,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $330,000 to $345,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $215,000 to $220,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,330,000 to $1,380,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $265,000 to $275,000.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $15,500 to $16,000.
  • The limit on annual contributions to an IRA increased from $6,500 to $7,000. The additional catch-up contribution limit for individuals aged 50 and over is now subject to an annual cost-of-living adjustment, but remains $1,000 for 2024.

The IRS previously updated Health Savings Account limits for 2023. See our post here.

The following chart summarizes various significant benefit Plan limits for 2022 through 2024:

Type of Limitation202420232022
415 Defined Benefit Plans$275,000$265,000$245,000
415 Defined Contribution Plans$69,000$66,000$61,000
Defined Contribution Elective Deferrals$23,000$22,500$20,500
Defined Contribution Catch-Up Deferrals$7,500$7,500$6,500
SIMPLE Employee Deferrals$16,000$15,500$14,000
SIMPLE Catch-Up Deferrals$3,500$3,500$3,000
Annual Compensation Limit$345,000$330,000$305,000
SEP Minimum Compensation$750$650$650
SEP Annual Compensation Limit$345,000$330,000$305,000
Highly Compensated$155,000$150,000$135,000
Key Employee (Officer)$220,000$215,000$200,000
Income Subject To Social Security Tax  (FICA)$168,600$160,200$147,000
Social Security (FICA) Tax For ER & EE (each pays)6.20%6.20%6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)1.45%1.45%1.45%
SECA (FICA Portion) for Self-Employed12.40%12.40%12.40%
SECA (Med. HI Portion) For Self-Employed2.90%2.90%2.90%
IRA Contribution$7,000$6,500$6,000
IRA Catch-Up Contribution$1,000$1,000$1,000
HSA Max. Contributions Single/Family Coverage$4,150/ $8,300$3,850/ $7,750$3,650/ $7,300
HSA Catchup Contributions$1,000$1,000$1,000
HSA Min. Annual Deductible Single/Family$1,600/
$3,200		$1,500/ $3,000$1,400/ $2,800
HSA Max. Out Of Pocket Single/Family$8,050/
$14,100		$7,500/ $15,000$7,050/ $14,100

IRS Announces 2023 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2023 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2023, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,850 (up from $3,650 in 2022), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,750 (up from $7,300 in 2022).

High deductible health plans. For calendar year 2023, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,500 for self-only coverage or $3,000 for family coverage (up from $1,400 and $2,800 in 2022), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,500 for self-only coverage or $15,000 for family coverage (up from $7,050 and $14,100 in 2022).

Rev. Proc 2022-24

IRS Announces COLA Adjusted Retirement Plan Limitations for 2022

The Internal Revenue Service today released Notice 2021-61 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2022.

Highlights Affecting Plan Sponsors of Qualified Plans for 2022

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,500 to $20,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,500.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains is increased from $13,500 to $14,000.
  • The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $230,000 to $245,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased for 2022 from $58,000 to $61,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $290,000 to $305,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $185,000 to $200,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,165,000 to $1,230,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $230,000 to $245,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $130,000 to $135,000.

The IRS previously updated Health Savings Account limits for 2021. See our post here.

The following chart summarizes various significant benefit Plan limits for 2020 through 2022:

Type of Limitation202220212020
415 Defined Benefit Plans$245,000$230,000$230,000
415 Defined Contribution Plans$61,000$58,000$57,000
Defined Contribution Elective Deferrals$20,500$19,500$19,500
Defined Contribution Catch-Up Deferrals$6,500$6,500$6,500
SIMPLE Employee Deferrals$14,000$13,500$13,500
SIMPLE Catch-Up Deferrals$3,000$3,000$3,000
Annual Compensation Limit$305,000$290,000$285,000
SEP Minimum Compensation$650$650$600
SEP Annual Compensation Limit$305,000$290,000$285,000
Highly Compensated$135,000$130,000$130,000
Key Employee (Officer)$200,000$185,000$185,000
Income Subject To Social Security Tax  (FICA)$147,000$142,800$137,700
Social Security (FICA) Tax For ER & EE (each pays)6.20%6.20%6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)1.45%1.45%1.45%
SECA (FICA Portion) for Self-Employed12.40%12.40%12.40%
SECA (Med. HI Portion) For Self-Employed2.90%2.90%2.90%
IRA Contribution$6,000$6,000$6,000
IRA Catch-Up Contribution$1,000$1,000$1,000
HSA Max. Contributions Single/Family Coverage$3,650/ $7,300$3,600/ $7,200$3,550/ $7,100
HSA Catchup Contributions$1,000$1,000$1,000
HSA Min. Annual Deductible Single/Family$1,400/ $2,800$1,400/ $2,800$1,400/ $2,800
HSA Max. Out Of Pocket Single/Family$7,050/ $14,100$7,000/ $14,000$6,900/ $13,800

IRS Announces 2022 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2022 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2022, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,650 (up from $3,600 in 2021), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,300 (up from $7,200 in 2021).

High deductible health plans. For calendar year 2022, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage (unchanged from 2021), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,050 for self-only coverage or $14,100 for family coverage (up from $7,000 and $14,000 in 2021).

Rev. Proc 2021-25

IRS Announces COLA Adjusted Retirement Plan Limitations for 2021

The Internal Revenue Service today released Notice 2020-79 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2021.

Highlights Affecting Plan Sponsors of Qualified Plans for 2021

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $19,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,500.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $13,500.
  • The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $230,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased for 2021 from $57,000 to $58,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $285,000 to $290,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan remains unchanged at $185,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,150,000 to $1,165,000, while the dollar amount used to determine the lengthening of the five year distribution period remains unchanged at $230,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $130,000.

The IRS previously updated Health Savings Account limits for 2021. See our post here.

The following chart summarizes various significant benefit Plan limits for 2019 through 2021:

Type of Limitation202120202019
415 Defined Benefit Plans$230,000$230,000$225,000
415 Defined Contribution Plans$58,000$57,000$56,000
Defined Contribution Elective Deferrals$19,500$19,500$19,000
Defined Contribution Catch-Up Deferrals$6,500$6,500$6,000
SIMPLE Employee Deferrals$13,500$13,500$13,000
SIMPLE Catch-Up Deferrals$3,000$3,000$3,000
Annual Compensation Limit$290,000$285,000$280,000
SEP Minimum Compensation$650$600$600
SEP Annual Compensation Limit$290,000$285,000$280,000
Highly Compensated$130,000$130,000$125,000
Key Employee (Officer)$185,000$185,000$180,000
Income Subject To Social Security Tax  (FICA)$142,800$137,700$132,900
Social Security (FICA) Tax For ER & EE (each pays)6.20%6.20%6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)1.45%1.45%1.45%
SECA (FICA Portion) for Self-Employed12.40%12.40%12.40%
SECA (Med. HI Portion) For Self-Employed2.90%2.90%2.90%
IRA Contribution$6,000$6,000$6,000
IRA Catch-Up Contribution$1,000$1,000$1,000
HSA Max. Contributions Single/Family Coverage$3,600/
$7,200		$3,550/ $7,100$3,500/ $7,00
HSA Catchup Contributions$1,000$1,000$1,000
HSA Min. Annual Deductible Single/Family$1,400/ $2,800$1,400/ $2,800$1,350/ $2,700
HSA Max. Out Of Pocket Single/Family$7,000/
$14,000		$6,900/ $13,800$6,750/ $13,500

IRS Announces 2021 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2021 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2021, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,600 (up from $3,550 in 2020), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,200 (up from $7,100 in 2020).

High deductible health plans. For calendar year 2021, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage (unchanged from 2020), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,000 for self-only coverage or $14,000 for family coverage (up from $6,900 and $13,800 in 2020).

Rev. Proc 2020-32

IRS Announces COLA Adjusted Retirement Plan Limitations for 2020

The Internal Revenue Service today released Notice 2019-59 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2020.

Highlights Affecting Plan Sponsors of Qualified Plans for 2020

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from  $19,000 to $19,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $6,000 to $6,500.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $13,000 to $13,500.
  • The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $225,000 to $230,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2019 from $56,000 to $57,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $280,000 to $285,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan is increased from $180,000 to $185,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,130,000 to $1,150,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $225,000 to $230,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $125,000 to $130,000.

The IRS previously Updated Health Savings Account limits for 2019. See our post here.

The following chart summarizes various significant benefit Plan limits for 2018 through 2020:

Type of Limitation202020192018
415 Defined Benefit Plans$230,000$225,000$220,000
415 Defined Contribution Plans$57,000$56,000$55,000
Defined Contribution Elective Deferrals$19,500$19,000$18,500
Defined Contribution Catch-Up Deferrals$6,500$6,000$6,000
SIMPLE Employee Deferrals$13,500$13,000$12,500
SIMPLE Catch-Up Deferrals$3,000$3,000$3,000
Annual Compensation Limit$285,000$280,000$275,000
SEP Minimum Compensation$600$600$600
SEP Annual Compensation Limit$285,000$280,000$275,000
Highly Compensated$130,000$125,000$120,000
Key Employee (Officer)$185,000$180,000$175,000
Income Subject To Social Security Tax  (FICA)$137,700$132,900$128,400
Social Security (FICA) Tax For ER & EE (each pays)6.20%6.20%6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)1.45%1.45%1.45%
SECA (FICA Portion) for Self-Employed12.40%12.40%12.40%
SECA (Med. HI Portion) For Self-Employed2.9%2.9%2.9%
IRA Contribution$6,000$6,000$5,500
IRA Catch-Up Contribution$1,000$1,000$1,000
HSA Max. Contributions Single/Family Coverage$3,550/ $7,100$3,500/ $7,00$3,450/ $6,900
HSA Catchup Contributions$1,000$1,000$1,000
HSA Min. Annual Deductible Single/Family$1,400/ $2,800$1,350/ $2,700$1,350/ $2,700
HSA Max. Out Of Pocket Single/Family$6,900/ $13,800$6,750/ $13,500$6,650/ $13,300

IRS Announces 2020 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

IRS has set 2020 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under § 223 of the Internal Revenue Code

The IRS has announced 2020 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2020, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,550 (up from $3,500 in 2019), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,100 (up from $7,000 in 2019).

High deductible health plans. For calendar year 2020, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage (up from $1,350 and $2,700 in 2019), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,900 for self-only coverage or $13,800 for family coverage (up from $6,750 and $13,500 in 2019).

Rev. Proc. 2019-25

IRS Announces COLA Adjusted Retirement Plan Limitations for 2019

The Internal Revenue Service today released Notice 2018-83 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.

Highlights Affecting Plan Sponsors of Qualified Plans for 2019

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
  • The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $220,000 to $225,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2019 from $55,000 to $56,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $275,000 to $280,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan is increased from $175,000 to $180,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,105,000 to $1,130,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $220,000 to $225,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $120,000 to $125,000.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,500 to $13,000.

The IRS previously Updated Health Savings Account limits for 2019. See our post here.

The following chart summarizes various significant benefit Plan limits for 2017 through 2019:

Type of Limitation 2019 2018 2017
415 Defined Benefit Plans $225,000 $220,000 $215,000
415 Defined Contribution Plans $56,000 $55,000 $54,000
Defined Contribution Elective Deferrals $19,000 $18,500 $18,000
Defined Contribution Catch-Up Deferrals $6,000 $6,000 $6,000
SIMPLE Employee Deferrals $13,000 $12,500 $12,500
SIMPLE Catch-Up Deferrals $3,000 $3,000 $3,000
Annual Compensation Limit $280,000 $275,000 $270,000
SEP Minimum Compensation $600 $600 $600
SEP Annual Compensation Limit $280,000 $275,000 $270,000
Highly Compensated $125,000 $120,000 $120,000
Key Employee (Officer) $180,000 $175,000 $175,000
Income Subject To Social Security Tax (FICA) $132,900 $128,400 $127,200
Social Security (FICA) Tax For ER & EE (each pays) 6.20% 6.20% 6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays) 1.45% 1.45% 1.45%
SECA (FICA Portion) for Self-Employed 12.40% 12.40% 12.40%
SECA (Med. HI Portion) For Self-Employed 2.9% 2.9% 2.9%
IRA Contribution $6,000 $5,500 $5,500
IRA Catch-Up Contribution $1,000 $1,000 $1,000
HSA Max. Contributions Single/Family Coverage $3,500/ $7,000 $3,450/ $6,900 $3,400/ $6,750
HSA Catchup Contributions $1,000 $1,000 $1,000
HSA Min. Annual Deductible Single/Family $1,350/ $2,700 $1,350/ $2,700 $1,300/ $2,600
HSA Max. Out Of Pocket Single/Family $6,750/ $13,500 $6,650/ $13,300 $6,550/ $13,100

IRS Announces 2019 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2019 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2019, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,500 (up from $3,450 in 2018), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,000 (up from $6,900 in 2018).

High deductible health plans. For calendar year 2019, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage (unchanged from 2018), and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,750 for self-only coverage or $13,500 for family coverage (up from $6,650 and $13,300 in 2018).

Rev. Proc. 2018-30