Annual Limits on Qualified Plans for 2023

Lisa Rippey
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On October 21, 2022, the Internal Revenue Service (IRS) released Notice 2022-55, which sets forth the 2023 cost-of-living adjustments affecting dollar limits on benefits and contributions for qualified retirement plans. Earlier this year, the health savings account (HSA) and high deductible health plan (HDHP) annual deductible and out-of-pocket expense adjustments were announced in Revenue Procedure 2022-24, and the health care FSA adjustments were announced in Revenue Procedure 2022-38. In addition, the Social Security Administration announced its cost-of-living adjustments for 2023 in October 2022, which includes a change to the taxable wage base.

The following chart summarizes the 2023 limits for benefit plans. The 2022 limits are provided for reference.

  2022 2023
Elective Deferral Limit 401(k), 403(b), 457(b) $20,500 $22,500
Catch-up Limit (age 50+) $6,500 $7,500
Defined Benefit Limit $245,000 $265,000
Defined Contribution Limit $61,000 $66,000
Dollar Limit – Highly Compensated Employees $135,000 $150,000
Officer – Key Employee $200,000 $215,000
Annual Compensation Limit $305,000 $330,000
SEP Eligibility Compensation Limit $650 $750
SIMPLE Deferral Limit $14,000 $15,500
SIMPLE Catch-up Limit (age 50+) $3,000 $3,500
Social Security Taxable Wage Base $147,000 $160,200
ESOP 5 Year Distribution Extension Account Minimum $1,230,000 $1,330,000
Additional Amount for 1-Year Extension $245,000 $265,000
HSA (Self/Family) Maximum Annual Contribution $3,650/$7,300 $3,850/$7,750
HDHP Minimum Deductible Limits $1,400/$2,800 $1,500/$3,000
Out-of-pocket Expense Annual Maximum $7,050/$14,100 $7,500/$15,000
Medical FSA Maximum Annual Contribution $2,850 $3,050
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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