IRS Announces Year 2023 Retirement Plan Limits
The Internal Revenue Service (“IRS”) announced today (October 21, 2022) the following dollar limits applicable to tax-qualified plans for 2023:
- The limit on the maximum amount of elective contributions that a person may make to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan increased from $20,500 to $22,500.
- The limit on “catch-up contributions” to a §401(k) plan, a §403(b) tax-sheltered annuity, or a §457(b) eligible deferred compensation plan for persons age 50 and older is upped from $6,500 to $7,500.
- The dollar limit on the maximum permissible allocation under a defined contribution plan is increased from $61,000 to $66,000.
- The maximum annual benefit under a defined benefit plan is increased from $245,000 to $265,000.
- The maximum amount of annual compensation that may be taken into account on behalf of any participant under a qualified plan will go from $305,000 to $330,000.
- The dollar amount used to identify “highly compensated employees” is increased from $135,000 to $150,000.
Additional information regarding benefit plan dollar limits can be obtained in IRS Notice 2022-55.