Client Alerts 2022 Employee Benefit Plan and Transportation Limits

Publication
11.11.21 | By: Larry A. Ruff

The below presents the Internal Revenue Service (IRS) recently announced 2022 cost-of-living adjustments for retirement, health and welfare plans, and transportation programs. Many of the retirement plan limits changed for 2022 due to recent inflation. Notable increases include the defined contribution and defined benefit plan limitations. Other notable increases in 2022 are the compensation-related limits and elective deferral amounts.

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The below presents the Internal Revenue Service (IRS) recently announced 2022 cost-of-living adjustments for retirement, health and welfare plans, and transportation programs. Many of the retirement plan limits changed for 2022 due to recent inflation. Notable increases include the defined contribution and defined benefit plan limitations. Other notable increases in 2022 are the compensation-related limits and elective deferral amounts.

Retirement Plan Limits

The 2022 annual retirement plan limitations as compared to 2021 are as follows:

  2022 2021
401(k), 403(b) and 457(b) Plan Elective Deferrals $20,500 $19,500
Age 50 Catch-Up Contribution (For Above Plans)  $6,500 $6,500  
SIMPLE Plan Elective Deferrals  $14,000 $13,500 
SIMPLE Plan Age 50 Catch-Up Contribution        $3,000 $3,000  
IRA Contribution Limit (Traditional and Roth) $6,000 $6,000 
IRA Age 50 Catch-Up Contribution (Not Indexed)  $1,000 $1,000
Defined Contribution Plan Limit            $61,000 $58,000 
Defined Benefit Plan Limit                      $245,000 $230,000  
Annual Compensation Limit                    $305,000 $290,000
Highly Compensated Employee               $135,000 $130,000 
Key Employee                                              $200,000 $185,000
FICA Taxable Wage Base                           $147,000 $142,800  

 

Health and Welfare Plan Limits

The 2022 annual limitations as compared to 2021 are as follows:

  2022 2021
Flexible Spending Accounts (FSA) $2,850 $2,750
Dependent Care FSA (Not Indexed) $5,000 $5,000
Health Savings Account (HSA) Age 55 Catch-Up Contribution (Not Indexed)  $1,000 $1,000
Self-Only Coverage:    
HSA Contribution        $3,650 $3,600
Minimum Deductible for High Deductible Health Plan (HDHP) $1,400 $1,400
Maximum Out-Of-Pocket (OOP) Expense Limit for HDHP $7,050 $7,000
Family Coverage:    
HSA Contribution $7,300   $7,200  
Minimum Deductible for HDHP $2,800 $2,800
Maximum OOP Expense Limit for HDHP            $14,100 $14,000

 

Qualified Transportation Fringe Benefit Limits

The 2022 monthly qualified transportation fringe benefit limitations as compared to 2021 are as follows:

  2022 2021
Parking and Transit $280 $270
Bicycle $20  $20

Plan sponsors should update payroll and plan administration systems for the 2022 cost-of-living adjustments and incorporate the new limits in relevant employee and participant communications.

For further information about the new IRS employee plan limits, contact Larry Ruff at [email protected] or 312.670.7444. Visit orba.com to learn more.

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