2021 Limits for Benefit Plans

Fisher Phillips
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Fisher Phillips

The IRS has announced the 2021 dollar limits impacting retirement plans and IRAs. The agency also issued welfare plan limits, as well as ACA penalties. The chart below summarizes these 2021 figures along with the corresponding limits for both 2019 and 2020.

Retirement Plan Limits

2019

2020

2021

Elective Salary Deferrals (401(k) & 403(b) & 457)

$19,000

$19,500

$19,500

SIMPLE Employee Deferrals

$13,000

$13,500

$13,500

Catch-Up Contribution (age 50 or older)

$6,000

$6,500

$6,500

SIMPLE Catch-Up Contributions

$3,000

$3,000

$3,000

Maximum Compensation

$280,000

$285,000

$290,000

Maximum Benefit for Defined Benefit Plan

$225,000

$230,000

$230,000

Maximum Annual Addition for Defined Contribution Plan

$56,000

$57,000

$58,000

Pay Threshold to Determine HCE

$125,000

$130,000

$130,000

Officer Pay Threshold To Determine Key Employee

$180,000

$185,000

$185,000

Social Security Taxable Wage Base (OASDI)

$132,900

$137,700

$142,800

SEP - Minimum Compensation

$600

$600

$650

ESOP – Determining the Length of the General Five-Year Distribution Period

$225,000

$230,000

$230,000

ESOP – Maximum Account Balance subject to Five-Year Distribution Period

$1,130,000

$1,150,000

$1,165,000

Traditional and Roth IRA Limits

2019

2020

2021

Contribution

$6,000

$6,000

$6,000

Catch-Up

$1,000

$1,000

$1,000

Deductible IRA income limit, single & also active participant in workplace retirement plan

$64,000 - $74,000

$65,000 - $75,000

$66,000 - $76,000

Deductible IRA income limit, married filing jointly & also active participant in workplace retirement plan

$103,000 - $123,000

$104,000 - $124,000

$105,000 - $125,000

Deductible IRA income limit, married filing jointly with a spouse that is an active participant in workplace retirement plan

$193,000- $203,000

$196,000- $206,000

$198,000- $208,000

Roth IRA income limit, single

$122,000- $137,000

$124,000- $139,000

$125,000- $140,000

Roth IRA income limit, married filing jointly

$193,000 - $203,000

$196,000- $206,000

$198,000- $208,000

Health Plan Limits

2019

2020

2021

High Deductible Health Plan – IRS limits self/family

-annual deductible –minimum

-out of pocket expenses (HSA) – maximum

$1,350/$2,700

$6,750/$13,500

$1,400/$2,800

$6,900/$13,800

$1,400/$2,800

$7,000/$14,000

HSA Contribution limit – individual/family

$3,500/$7,000

$3,550/$7,100

$3,600/$7,200

HSA Contribution catch-up

$1,000

$1,000

$1,000

FSA (flexible spending account – health)

$2,700

$2,750

$2,750

FSA (dependent care account)

$5,000

$5,000

$5,000

Qualified Transportation Fringe Benefit (Transit pass, van pool, & qualified parking)

$265

$270

$270

Out of pocket expenses (ACA) -PHSA §2707(b) maximum (in-network essential health benefits for non-grandfathered plans)

- Self Only

- Embedded Individual Max within Family Coverage

- Family

$7,900

$7,900

$15,800

$8,150

$8,150

$16,300

$8,550

$8,550

$17,100

ACA affordability safe harbor

9.86%

9.78%

9.83%

ACA Penalties

- No Offer of Coverage

- Coverage Offer Lacks Minimum Value or Affordability

$2,500

$3,750

$2,570

$3,860

$2,700

$4,060

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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