The IRS recently announced that the amount people can contribute to their 401(k) plans in 2022 has increased to $20,500, up from $19,500 for last year. The IRS also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2022 tax year in Notice 2021-61 PDF, posted on IRS.gov. Below are some comprehensive charts to help you better understand these plan limits changes.
401(k) Plan Limits
| Defined Contribution Plans | 2022 | 2021 | Change |
Maximum employee elective deferral (age 49 or younger) | $20,500 | $19,500 | +$1,000 |
Employee catch-up contribution (age 50 or older by year-end) | $6,500 | $6,500 | no change |
Maximum employee elective deferral plus catch-up contribution (age 50 or older) | $27,000 | $26,000 | +$1,000 |
Defined contribution maximum limit, employee + employer (age 49 or younger) | $61,000 | $58,000 | +$3,000 |
Defined contribution maximum limit (age 50 or older), all sources + catch-up | $67,500 | $64,500 | +$3,000 |
Employee compensation limit for calculating contributions | $305,000 | $290,000 | +$15,000 |
Key employees’ compensation threshold for top-heavy plan testing | $200,000 | $185,000 | +$15,000 |
Highly compensated employees’ threshold for nondiscrimination testing | $135,000 | $130,000 | +$5,000 |
Source: IRS Notice 2021-61.
HSA and HDHP Limits
| Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs) | 2022 | 2021 | Change |
HSA contribution limit | Self-only: $3,650 Family: $7,300 | Self-only: $3,600 Family: $7,200 | Self-only: +$50 Family: +$100 |
HSA catch-up contributions | $1,000 | $1,000 | no change |
HDHP minimum deductibles | Self-only: $1,400 Family: $2,800 | Self-only: 1,400 Family: $2,800 | no change no change |
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) | Self-only: $7,050 Family: $14,100 | Self-only: $7,000 Family: $14,000 | Self-only: +50 Family: +$100 |
Source: IRS Revenue Procedure 2021-25.
Health FSA Limits
Health Care Flexible Spending Accounts (Health FSAs) and Limited-Scope (Vision/Dental) FSAs | 2022 | 2021 | Change |
Maximum salary deferral | $2,850 | $2,750 | +$100 |
Maximum rollover amount | $570 | $550 (as indexed, but carryover of full unused balance allowed)1 | +$20 |
Source: IRS Revenue Procedure 2021-45.
Dependent Care FSA Limits
Dependent Care FSAs (DC-FSAs) also called Dependent Care Assistance Plans (DCAPs) | 2022 | 2021 | Change |
Maximum salary deferral | $5,000 | $5,000 (as indexed, but raised to $10,500)1 | no change (indexed amount) |
Maximum salary deferral | $2,500 | $2,500 (as indexed, but raised to $5,250)1 | no change (indexed amount) |
Source: IRS Revenue Procedure 2021-45.
QSEHRA Limits
| Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) | 2021 | 2021 | Change |
Maximum payments and reimbursements through the QSEHRA | Self-only: $5,450 Family: $11,050 | Self-only: $5,300 Family: $10,700 | Self-only: +$150 Family: +$350 |
Source: IRS Revenue Procedure 2021-45.
Commuter Transit and Parking Limits
Qualified Transportation Benefit | 2022 | 2020 | Change |
Transit passes and van pool services (employer + employee) | $280 | $270 | +$10 |
Qualified parking | $280 | $270 | +$10 |
Source: IRS Revenue Procedure 2021-45.
Adoption Assistance
| Adoption Benefits (Annual limits) | 2022 | 2021 | Change |
Excludable Amount | $14,890 | $14,440 | +$450 |
Phase-out income thresholds: | |||
Phase-out begins | $223,410 | $216,660 | +$6,750 |
Phase-out complete | $263,410 | $256,660 | +$6,750 |
Source: IRS Revenue Procedure 2021-45.
Earnings Subject to Social Security Payroll Tax
Social Security (FICA) Payroll Tax | 2022 | 2020 | Change |
Maximum earnings subject to Social Security 12.4% FICA payroll tax (6.2% paid by employer and 6.2% paid by employee) | $147,000 | $142,800 | +$4,200 |
Source: Social Security Administration.
If you or your business need further information on the 2022 Benefit Plan Limits and Thresholds, don’t hesitate to contact us! We’re here to help.
