The Internal Revenue Service has released the Cost-of-Living Adjustments (COLAs) for 2023. As anticipated, many of the limits were increased.
Some of the most notable 2023 retirement and pension plan limitations are:
- 401(k) / 403(b) / 457 Contributions – increased to $22,500.
- 401(k) / 403(b) / 457 Catch-up Contributions – increased to $7,500.
- Compensation Limit – increased to $330,000.
- Defined Contribution Maximum Annual Contribution Limit – increased to $66,000.
- Defined Benefit Maximum Annual Benefit Limit – increased to $265,000.
- Highly Compensated Employees’ Compensation Limit – increased to $150,000.
- Key Employee Officer Compensation Limit – increased to $215,000.
IRS announcement of Retirement Plan limits:
Some of the notable 2023 limits for Health & Welfare Benefit Plans are:
- Health Care FSA maximum contribution limit increased to $3,050.
- Health Care FSA Carryover limit increased to $610*
- Transportation plans: transit and parking allowances increased to $300 per month.
- Adoption assistance program maximum excludable amount increased to $15,590.
- Adoption tax credit is increased to $15,590.
- HSA limits for 2022 were released in May. Limits increased except for the catch-up contribution.
*The carryover maximum limit applies in the following plan year. For example, the amount that can carry over into 2023 is $570 (20% of the 2022 Health FSA limit). The amount that can carry over into 2024 is $610 (20% of the 2023 Health FSA limit).
IRS announcement of Health & Welfare limits:
Please feel free to contact us if you have any questions about any of the new Cost-of-Living Adjustments or Plan Limitations.
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