Client Alerts 2023 Employee Benefit Plan and Transportation Limits

Publication
10.24.22

The below presents the Internal Revenue Service (IRS) recently announced 2023 cost-of-living adjustments for retirement, health and welfare plans, and transportation programs.

read more

The below presents the Internal Revenue Service (IRS) recently announced 2023 cost-of-living adjustments for retirement, health and welfare plans, and transportation programs. Retirement plan limitations increased significantly for 2023 due to inflation. Percentage-wise, retirement plan increases ranged from 7.5% to 16.7%. Most limitations increased by about 8.2%. Other percentages varied due to rounding. Health and welfare limitation increases were not as high because they were determined earlier in 2023 before inflation peaked, with an average increase of roughly 6.5%.

Retirement Plan Limits

The 2023 annual retirement plan limitations as compared to 2022 are as follows:

  2023 2022
401(k), 403(b) and 457(b) Plan Elective Deferrals $22,500 $20,500
Age 50 Catch-Up Contribution (For Above Plans)  $7,500 $6,500  
SIMPLE Plan Elective Deferrals  $15,500 $14,000
SIMPLE Plan Age 50 Catch-Up Contribution        $3,500 $3,000  
IRA Contribution Limit (Traditional and Roth) $6,500 $6,000 
IRA Age 50 Catch-Up Contribution (Not Indexed)  $1,000 $1,000
Defined Contribution Plan Limit            $66,000 $61,000
Defined Benefit Plan Limit                      $265,000 $245,000  
Annual Compensation Limit                    $330,000 $305,000
Highly Compensated Employee               $150,000 $135,000 
Key Employee                                              $215,000 $200,000
FICA Taxable Wage Base                           $160,200 $147,000 

 

Health and Welfare Plan Limits

The 2023 annual limitations as compared to 2022 are as follows:

  2023 2022
Flexible Spending Accounts (FSA) $3,050 $2,850
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        $3,850 $3,650
Minimum Deductible for High Deductible Health Plan (HDHP) $1,500 $1,400
Maximum Out-Of-Pocket (OOP) Expense Limit for HDHP $7,500 $7,050
Family Coverage:    
HSA Contribution $7,750 $7,300  
Minimum Deductible for HDHP $3,000 $2,800
Maximum OOP Expense Limit for HDHP            $15,000 $14,100

 

Qualified Transportation Fringe Benefit Limits

The 2023 monthly qualified transportation fringe benefit limitations as compared to 2022 are as follows:

  2023 2022
Parking and Transit $300 $280
Bicycle $20  $20

Plan sponsors should update payroll and plan administration systems for the 2023 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 your ORBA advisor or 312.670.7444. Visit orba.com to learn more.

News & Events

view all

Forward ThinkingClient Alerts

view all

seminars & events

Guides

ORBA will gladly provide you with hard copies of the useful guides listed below. Select which guides you would like to receive and submit the form below.

  • Tax Pocket Guide
  • Tax Planning Guide
  • Records Retention Schedule
  • Auto, Travel & Business Log

request guide

Close
Forward Thinking
Forward Thinking