COLA 2024: Cost-of-Living Adjustments

TRI-AD presents the Cost-of-Living Adjustments (COLAs) for 2024. These limits are provided each year by the Internal Revenue Service and are effective as of January 1, 2024.

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Retirement Cost-of-Living Adjustments
Maximum Dollar Limitations

Employee Deferral Limits

2024

 2023 2022 2021

2020
401(k) Contribution $23,000 22,500 20,500 19,500 19,500
403(b) Contribution $23,000

22,500

20,500

 19,500 19,500

457 Contribution

$23,000

 22,500 20,500 19,500 19,500

SIMPLE 401(k)/IRA

 $16,000 15,500 14,000 13,500 13,500
Employee Catch-Up Limits

401(k), 403(b), 457

 $7,500 7,500 6,500 6,500 6,500

SIMPLE 401(k)/IRA

 $3,500 3,500 3,000 3,000 3,000
Other Plan Limitations
Compensation Cap

$345,000

 330,000

305,000

 290,000 285,000
Defined Benefit Plan Maximum Benefit

$275,000

 265,000

245,000

 230,000

230,000
Defined Contribution Plan Maximum Contribution $69,000

66,000

61,000

 58,000

57,000
Highly Compensated Employees’ Compensation Exceeding $155,000

150,000

 135,000 130,000

130,000
Key Employee Officer Compensation

$220,000

 215,000 200,000 185,000

185,000
Key Employee 1% Owner

$150,000

 150,000 150,000 150,000

150,000
SEP Participation Coverage Compensation Level

$750

 750 650 650

600
ESOP Threshold for 5-Year Distribution Period

$1,380,000

1,330,000

 1,230,000 1,165,000

1,150,000

ESOP Incremental Threshold for Extending 5-Year Distribution Period (max 5 additional years)

 $275,000 265,000 245,000 230,000

230,000
Social Security Taxable Wage Bases
– Social Security $168,600

160,200

 147,000 142,800 137,700
– Medicare

No Limit

 No Limit No Limit No Limit

No Limit
Social Security Tax Rates By Percentage
– Social Security – Employer

6.20

 6.20 6.20 6.20

6.20
– Social Security – Employee

6.20

 6.20 6.20 6.20

6.20
– Medicare – Employer and Employee

1.45

 1.45 1.45 1.45

1.45
– Per Employer/Per Employee Combined Rate

7.65

 7.65 7.65 7.65

7.65
Combined Rate

15.30

 15.30 15.30 15.30

15.30
Additional Medicare Tax on Wages above $200,000 – Employee Only

.9*

 .9* .9* .9*

.9*

*The Affordable Care Act imposes an additional .9% Medicare tax on wages above $200,000 ($250,000 for married couples filing jointly, $125,000 for married couples filing separately, and $200,000 for other filers). Employers are required to withhold the additional .9% Medicare tax (a total of 2.35%) on wages above $200,000 regardless of the employee’s tax filing status. Employers do not match this additional tax.

Health & Welfare Cost-of-Living Adjustments
Maximum Dollar Limitations

Health Care Flexible Spending Accounts in a Cafeteria Plan

2024

 2023 2022

2021
Maximum Contribution $3,200

2,850

 2,750

2,750
Maximum Carryover Amount1 $640 610 570 550
Dependent Care Flexible Spending Accounts in a Cafeteria Plan
Maximum Contribution

$5,000

 5,000 5,000

10,500*
Maximum Contribution if Married Filing Separately

$2,500

 2,500 2,500 5,250*
Dependent Care Tax Credit on Personal Tax Return2
1 Qualifying Individual

$3,000

3,000

 3,000 8,000*
2 or more Qualifying Individuals

$6,000

6,000

 6,000 16,000*
Qualified Relative Income Allowance
Maximum Amount a qualified relative can earn and still be considered a dependent for tax purposes

$5,050

4,700

 4,400 4,300
Qualified Transportation Plan3
Parking – Monthly Limit

$315

300

 280

270
Transit Passes and Vanpooling (Combined) – Monthly Limit

$315

300

 280 270
Bicycle benefit (Employer-funded) – Monthly Limit

$20

20

 20

20
Adoption Assistance Program4
Maximum Exclusion for Employer-Provided Program5 $16,810

15,950

 14,890

14,440
Adoption Tax Credit Limit $16,810

15,950

 14,890 14,440
Modified Adjusted Gross Income Limits for Employer-Provided
Adoption Assistance Program and Tax Credit

Full credit if adjusted gross income below

$252,150

 239,230 223,410 216,660

Phased credit if adjusted gross income between

$252,150
-$292,150

 239,230–279,230 223,410–263,410 216,660–
256,660

No credit allowed for adjusted gross income above

$292,150

 279,230 263,410 256,660
Educational Assistance Programs
Maximum nontaxable educational assistance benefit

$5,250

 5,250 5,250 5,250
Health Savings Accounts

Contribution Limit per Individual

$4,150

 3,850

3,650

 3,600

Contribution Limit per Family

 $8,300

7,750 

 7,300 7,200

Catch-up Contribution for Age 55 and Older

 $1,000 1,000 1,000

1,000

Out-of-pocket Maximum per Individual

 $8,050

7,500

 7,050

7,000

Out-of-pocket Maximum per Family

 $16,100

15,000

 14,100 14,000

Minimum Deductible per Individual

 $1,600 1,500

1,400

 1,400

Minimum Deductible per Family

$3,200

3,000

 2,800 2,800
Highly Compensated Employee Compensation Exceeding $155,000

150,000

 135,000

130,000
Key Employee Officer Compensation $220,000

215,000

200,000

 185,000
Key Employee 1% Owner $150,000 150,000 150,000 150,000

*Increased limits due to COVID-19 legislative relief.

1The carryover maximum limit applies in the following plan year. For example, the amount that can carry over into 2024 is $610
(20% of the 2023 Health FSA limit).  The amount that can carry over into 2025 is $640 (20% of the 2024 HFSA limit).
2 Credit may be adjusted based on the level of the taxpayer’s adjusted gross income and is reduced by amounts excluded from income under a Dependent Care Reimbursement Account plan sponsored by an employer.
3 The Tax Cuts & Jobs Act of 2017 changed the bicycle benefit to a taxable benefit for years after 2017 and before 2026.
4 An employer-sponsored Adoption Assistance Program may be a stand-alone program or contained in a Cafeteria Plan.
5 If employer-sponsored Adoption Assistance Program is contained in a Cafeteria Plan, this is the maximum limit within the plan year.