2023 Dollar Limits on Compensation and Benefits Announced

Blog
October 24, 2022

The Internal Revenue Service has announced the 2023 cost-of-living adjustments for various limits affecting employee benefit plans. The more common limits are detailed below for 2022 and 2023. Due to the unprecedented inflationary environment, the limits have increased by record amounts.

2023 2022
401(k) & 403(b) Elective Deferrals $22,500 $20,500
Catch-Up Contribution for participants age 50 and over $7,500 $6,500
Defined Contribution Plans-IRC 415

(Including SEP and Keogh Plans)

$66,000 $61,000
Maximum Benefit for Defined Benefit Plans

Note: This is not the maximum contribution, it is the maximum benefit that can be funded.

$265,000 $245,000

SIMPLE Retirement Plans

2023 2022
Elective Deferrals $15,000 $14,000
Catch-Up Contribution for Participants Age 50 and over $3,500 $3,000
Maximum Annual Compensation for Determining Contributions and Benefits $330,000 $305,000
Compensation Limit for Key Employee Determination $215,000 $200,000
Compensation Limit for Highly Compensated Determination $150,000 $135,000
IRA Contributions $6,500 $6,000
IRA Catch-Up Contribution $1,000 $1,000

 

A detailed listing of all of the adjusted limitations can be found here.

If you should have any questions about how these limits apply to you, please contact Mark Flanagan of Aronson’s Compensation and Benefits Practice at 301.231.6257.