2023 Benefit Limits

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The Internal Revenue Service and Social Security Administration have announced the various retirement plan benefit and employment tax limits for 2023. Certain limitations will not change for 2023 because they are not subject to annual adjustments.  However, limits tied a cost of living index have increased.   

The limits for 2023, as compared to those in effect for 2022, are set forth below.

Retirement Plan Limits
  2022 2023
Limits on benefits and contributions    
            401(k) & 403(b) plans, elective deferral limit $20,500 $22,500
            457(b) plan, total contribution limit $20,500 $22,500
            Age 50 catch-up contribution limit $6,500 $7,500
            Defined contribution plan, total contribution limit $61,000 $66,000
            Defined benefit plan, annual accrual limit $245,000 $265,000
“Highly compensated employee” status $135,000 $150,000
Annual compensation limit $305,000 $330,000
“Key employee” officer status $200,000 $215,000
SIMPLE plans    
            Elective deferral limit $14,000 $15,500
            Catch-up contribution limit $3,000 $3,500
IRAs    
            Contribution limit $6,000 $6,500
            Catch-up contribution limit $1,000 $1,000
     
Health Care FSA  
  2020 2021     
Annual salary reduction limit $2,850 $3,050
     
Health Savings Accounts
  2020 2021
Annual HSA contribution deduction limit    
            Self-only coverage $3,650 $3,850
            Family coverage $7,300 $7,750
            Catch-up contribution $1,000 $1,000
Out-of-pocket spending limit    
            Self-only coverage $7,050 $7,500
            Family coverage $14,100 $15,000
Minimum annual deductible    
            Self-only coverage $1,400 $1,500
            Family coverage $2,800 $3,000
     
Qualified Transportation Fringe Benefit
  2020 2021
Maximum monthly qualified parking benefit $280 $300
Maximum monthly qualified transit pass benefit $280 $300
     
Social Security Limits
  2020 2021
FICA wage base $147,000 $160,200
Earnings test thresholds    
            Before normal retirement age $19,560 $21,240
            Year of normal retirement age $51,960 $56,520
Maximum monthly benefit at full retirement age $3,345 $3,627
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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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