2022 Plan Limits

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

 

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.