Posted By: Saaib T. Uppal, CPA, QKA
IRS Announces Increases on Benefits and Contributions Dollar Limitations for 2022
The IRS has announced cost-of-living adjustments that should be noted for retirement planning purposes.
Below is a chart that outlines employee benefit plan limits for 2022
Plan Limits
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| RETIREMENT & SOCIAL SECURITY | 2022 Limit | 2021 Limit | 2020 Limit |
| Section 401(k), 403(b), 457(b) elective deferrals | $20,500 | $19,500 | $19,500 |
| 401(k) or 403(b) catch up contributions | $6,500 | $6,500 | $6,500 |
| Section 415 – Defined contribution plan maximum annual contributions without catch up | $61,000 | $58,000 | $57,000 |
| Section 415 – Defined benefit plan maximum annual benefit | $245,000 | $230,000 | $230,000 |
| Section 414(q)(1)(B) – Highly compensated employee -minimum compensation (applies to lookback years in indicated year) | $135,000 | $130,000 | $130,000 |
| Section 416 – Key employee definition – officer compensation | $200,000 | $185,000 | $185,000 |
| Section 416 – Key employee definition – 1% owner compensation | $150,000 | $150,000 | $150,000 |
| Section 401(a)(17) – Maximum includible annual compensation | $305,000 | $290,000 | $285,000 |
| IRA or Roth IRA annual contribution limit | $6,000 | $6,000 | $6,000 |
| IRA or Roth IRA annual catch up contributions | $1,000 | $1,000 | $1,000 |
| SIMPLE Salary Deferral Limit | $14,000 | $13,500 | $13,500 |
| SIMPLE Catch-up Limit | $3,000 | $3,000 | $3,000 |
Plan administrators should ensure they pass along this new information to their participants, so they have all the required information when planning their deferrals for 2022.
