Posted By: Saaib T. Uppal, CPA, QKA
IRS Announces Increases on Benefits and Contributions Dollar Limitations for 2023
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 2023:
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RETIREMENT & SOCIAL SECURITY |
2023 Limit |
2022 Limit |
2021 Limit |
| Section 401(k), 403(b), 457(b) Elective Deferrals | $22,500 | $20,500 | $19,500 |
| 401(k) or 403(b) Catch-up Contributions | $7,500 | $6,500 | $6,500 |
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Section 415 – Defined Contribution Plan Maximum Annual Contributions without Catch-up
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$66,000 | $61,000 | $58,000 |
| Section 415 – Defined Benefit Plan Maximum Annual Benefit | $265,000 | $245,000 | $230,000 |
| Section 414(q)(1)(B) – Highly Compensated Employee – Minimum Compensation (applies to lookback years in indicated year) | $150,000 | $135,000 | $130,000 |
| Section 416 – Key Employee Definition – Officer Compensation | $215,000 | $200,000 | $185,000 |
| Section 416 – Key Employee Definition – 1% Owner Compensation | $150,000 | $150,000 | $150,000 |
| Section 401(a)(17) – Maximum Includible Annual Compensation | $330,000 | $305,000 | $290,000 |
| IRA or Roth IRA Annual Contribution Limit | $6,500 | $6,000 | $6,000 |
| IRA or Roth IRA Annual Catch-up Contributions | $1,000 | $1,000 | $1,000 |
| SIMPLE Salary Deferral Limit | $15,500 | $14,000 | $13,500 |
| SIMPLE Catch-up Limit | $3,500 | $3,000 | $3,000 |
Plan Limits
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 2023.
