The Internal Revenue Service has come through on its annual holiday gift of releasing annual cost-of-living adjustments applicable to employee benefit plans. A year-to-year comparison of limitations applicable to benefit plans can be found here: 2022 Annual Limitations Chart
As in prior years, most of the benefit plan limitations have increased. Notably, these increases include changing the contribution limit (section 415 limitation) for defined contribution plans from $58,000 to $61,000, and changing the annual compensation limit for purposes of Internal Revenue Code Section 401(a)(17) from $290,000 to $305,000 (from $430,000 to $450,000 for certain governmental plans).
In addition, the limits for the amount of elective deferrals (401(k) contributions) that can be made to defined contribution plans will increase from $19,500 to $20,500, while the amount of catch-up contributions is staying unchanged at $6,500. The limit for Health Savings Accounts (HSAs) will increase from $3,600 to $3,650 for single filers, and from $7,200 to $7,300 for families.
The Social Security wage base will increase from $142,800 to $147,000.
The post IRS Releases 2022 Cost of Living Adjustments for Benefit Plans appeared first on Benefits & Compensation Blog.