|
Qualified Plan Adjustments
|
|
402(g) Deferral Limit – Annual limit on pre-tax
salary deferrals to 401(k), 403(b) and 457(b) plans – IRC §§ 402(g)(1), 402(g)(3) & 457(e)(15)
|
$22,500
|
$23,000
|
|
Age 50 Additional Catch-Up Deferrals – Age
50 & older “catch-up” deferrals beyond the 402(g) limit above available for
401(k), 403(b), & governmental 457(b) plans – IRC § 414(v)(2)(B)(i).
Under the SECURE 2.0 Act of 2022 (SECURE 2.0) § 603 the catch-up
for highly-compensated employees (in the previous
year) to a qualified plan (401(k), 403(b) & 457(b)) will need to be
Roth contributions beginning in 2026. Also, under SECURE 2.0 § 109 the
catch-up for those ages 60-63 will be increased about 50% in 2025.
|
$7,500
|
$7,500
|
|
DB Benefit Limit – Limit on annual benefits from
defined benefit plans – IRC §
415(b)
|
$265,000
|
$275,000
|
|
DC Contribution Limit – Annual contribution limit
for defined contribution plans –
IRC § 415(c)
|
$66,000
|
$69,000
|
|
Compensation Limit – Annual compensation limit
for qualified plans and SEPs – IRC
§§ 401(a)(17), 404(l) & 408(k)
|
$330,000
|
$345,000
|
|
Grandfathered § 401(a)(17) annual compensation limit for
governmental plans in effect on July 1, 1993 – Treas. Reg. § 1.401(a)(17)-1(d)(4)(ii)
|
$490,000
|
$505,000
|
|
Highly Compensated Employee – Highly compensated
employee threshold for nondiscrimination testing in the following year – IRC § 414(q)(1)(B)
|
$150,000
|
$155,000
|
|
Key Employee Officers in Top Heavy Plan – Key
employee threshold for officers in top heavy plans – IRC § 416(i)(1)(A)(i)
|
$215,000
|
$220,000
|
|
QLAC Limit – Limit on premiums for qualified
longevity annuity contracts (QLACs) under Treas. Reg. § 1.401(a)(9)-6 Q&A 17 increased from $150,000 to
$200,000 under SECURE 2.0 § 202 for contracts purchased or received on or
after Dec. 29, 2022
|
$200,000
|
$200,000
|
|
ESOP Distributions – (i) minimum account
balance allowing extension of distribution period beyond 5 years; and (ii)
dollar amount (or fraction) in excess of minimum account balance allowing
extension of distribution period for additional year – IRC § 409(o)(1)(C)(ii)
|
(i) $1,330,000
(ii) $265,000
|
(i) $1,380,000
(i) $275,000
|
|
SEP & SIMPLE Adjustments
|
|
SEP Earnings Level – Minimum earnings level to
qualify for Simplified Employee Pension (SEP) IRA – IRC § 408(k)
|
$750
|
$750
|
|
SIMPLE Salary Deferral Limit – SIMPLE 401(k) or SIMPLE
IRA elective deferral limit – IRC
§ 408(p)(2)(E) (referenced by § 401(k)(11)(B)(i)(I))
|
$15,500
|
$16,000
|
|
SIMPLE Catch-Up for Age 50 – SIMPLE 401(k) or SIMPLE
IRA age 50 catch-up – IRC § 414(v)(2)(B)(ii). Under
SECURE 2.0 beginning in 2024 the SIMPLE catch-up is supposed to increase by
10%. Also, under SECURE 2.0 § 109 the catch-up for SIMPLE plans for
those ages 60-63 will be increased about 50% in 2025.
|
$3,500
|
$3,500
|
|
Traditional IRA & Roth IRA Adjustments
|
|
IRA Limit – Traditional IRA and Roth IRA
contribution limit is indexed –
IRC §§ 219(b)(5)(A), 408(a)(1) & 408A(c)(2)
|
$6,500
|
$7,000
|
|
Spousal IRA Contribution Limit – A
spousal IRA or spousal Roth IRA where both spouses contribute is double the
above.
|
$13,000
|
$14,000
|
|
IRA Catch-up Contribution – Age 50 & older
“catch-up” for IRAs & Roth IRAs (not currently adjusted but under SECURE
2.0 § 108 will adjust beginning in 2025) – IRC § 219(b)(5)
|
$1,000
|
$1,000
|
|
Phaseout where IRA Owner is also
Covered by an Employer Plan –
Adjusted gross income (AGI) phase-out of deductible contribution to IRA if individual
is also covered by employer-sponsored retirement plan for: (i) married filing
jointly, (ii) single or (iii) married filing separately – IRC
§ 219(g)(1)-(5)
|
(i) $116,000 – $136,000, (ii) $73,000 – $83,000, (iii) 0 – $10,000
|
(i) $123,000 – $143,000,
(ii) $77,000 – $87,000, (iii) 0 – $10,000
|
|
Phaseout where Spouse of IRA Owner is
Covered by an Employer Plan –
AGI phase-out of deductible contribution to IRA if contributor is not covered
by an employer-sponsored plan but spouse is covered by an employer-sponsored
plan – IRC § 219(g)(7)
|
$218,000 – $228,000
|
$230,000-$240,000
|
|
Phaseout of Roth IRA Contributions – AGI phase-out deduction for contributions to the Roth
IRA for (i) married filing
jointly, (ii) single or (iii) married filing separately – IRC § 408A(c)(3)(B)
|
(i) $218,00 – $228,000, (ii) $138,000 – $153,000, (iii) 0 – $10,000
|
(i) $230,000 – $240,000,
(ii) $146,000 – $161,000, (iii) 0 – $10,000
|
|
Saver’s Credit – A “saver’s credit” under IRC § 25B(b) provides a
tax credit for salary deferrals to a 401(k) or 403(b) plan or contributions
to an IRA for those with AGI below a certain level, with a credit (for
married filing jointly) of (i) 50% of contribution if AGI is not more than a
specified dollar amount, (ii) 20% if AGI is in a specified dollar range and (iii)
10% if AGI is in higher specified dollar range. Single and married filing
separately have lower limits. (Effective for
plan years beginning 2027, SECURE 2.0 § 103 sunsets the § 25B saver’s credit and
replaces it with a federal matching contribution under IRC § 6433, which is 50%
of the contributions up to $2,000 per individual, but phases out if AGI is between
$41,000 and $71,000 for married filing jointly, and $20,500 to $35,500 for
single taxpayers and married filing separate returns.)
|
(i) $43,500, (ii) $43,501-
$47,500, (iii) $47,501 – $73,000
|
(i) $46,000, (ii) $46,001-
$50,000, (iii) $50,001 – $76,500
|
|
PBGC Premium and Guaranty Adjustments
|
|
PBGC Flat-Rate Premium – PBGC flat-rate premium per participant for a
single-employer plan (under ERISA § 4006 & PBGC Premium Rates webpage)
|
$96
|
$101
|
|
PBGC Variable-Rate Premium – PBGC variable-rate premium for single-employer
plans (i) per $1,000 of Unfunded Vested Benefits, and (ii) per participant
cap. SECURE
2.0 § 349 will increase in 2025 the variable rate $52 per participant x $1000
of UVBs so that the $52 amount is indexed for inflation.
|
(i) $52
(ii) $652
|
(i) $52
(ii) $686
|
|
Multiemployer Premium – PBGC premium for
multiemployer plan per participant
|
$35
|
$37
|
|
PBGC Guaranteed Benefit – PBGC guaranteed benefits
under ERISA § 4022 where PBGC is the trustee (for annual single life annuity
beginning at age 65)
|
$81,000
($6,750 a month)
|
$85,295.40
($7,107.95 a month)
|
|
FSA, HRA, HSA, and ACA Adjustments
|
|
Health FSA Limit – Health FSA (flexible
spending account) limit – IRC
§ 125(i)
|
$3,050
|
$3,200
|
|
Heath FSA Carryover – Health FSA carryover
amount
|
$610
|
$640
|
|
HRA Contribution Limit – Health Reimbursement
Account (HRA) maximum employer contribution – Treas. Reg. § 54.9831-1(c)(3)(viii)(B)
|
$1,950
|
$2,100
|
|
HSA Limit – Health Savings Account (HSA) deduction limit for
(i) single & (ii) family – IRC § 223(b)(2)
|
(i) $3,850
(ii) $7,750
|
(i) $4,150
(ii) $8,300
|
|
HDHP Deductible – HDHP (with HSA) minimum
deductibles for (i) self-only or (ii) family coverage – IRC § 223(c)
|
(i) $1,500
(ii) $3,000
|
(i) $1,600
(ii) $3,200
|
|
HDHP Out of Pocket – HDHP (with HSA) maximum
out-of-pocket amounts for (i) self-only & (ii) family coverage – IRC § 223(c)
|
(i) $7,500
(ii) $15,000
|
(i) $8,050
(ii) $16,100
|
|
QSEHRA Limit – Qualified small employer HRA (QSEHRA)
for small business (less than 50 employees) and the maximum payments and
reimbursements (i) single coverage and (ii) family coverage – IRC § 9831(d)
|
(i) $5,850
(ii) $11,800
|
(i) $6,150
(ii) $12,450
|
|
MSAs – Existing Archer Medical Savings Accounts have annual
deductible range (i) for single coverage & (ii) for family coverage, and
out-of-pocket maximum (iii) for single coverage and (iv) for family coverage –
IRC § 220(c)(2)(A)
|
(i) $2,650 – $3,950, (ii) $5,300 – $7,900, (iii)
$5,300,
(iv) $9,650
|
(i) $2,800
– $4,150,
(ii) $5,550 – $8,350,
(iii) $5,550,
(iv) $10,200
|
|
ACA Out of Pocket Maximum – Affordable Care Act (ACA)
out-of-pocket maximum (cost-sharing) for non-grandfathered group health plans
for (i) self & (ii) family – 42 USC § 18022(c); 45 CFR § 156.130(a)
|
(i) $9,100
(ii) $18,200
|
(i) $9,450
(ii) $18,900
|
|
ACA Affordability Rate – ACA health plan “affordability”
rate of pay (percentage of household income) for premium tax credit – IRC §
36B(c)(2)(C)(i)(II)
|
9.12%
|
8.50%
|
|
ACA Pay or Play Penalties – ACA employer shared
responsibility assessments (i) if do not offer coverage to 95% of full-time
employee, penalty for each FTE; and (ii) if do offer coverage to 95% of FTEs
but is not “affordable” penalized only for employees who buy Marketplace
coverage and receive premium tax credit – IRC § 4980H
|
(i) $2,880
(ii) $4,320
|
(i) $2,970
(ii) $4,460
|
|
Fringe Benefit Adjustments
|
|
Transportation Fringe – Qualified transportation &
parking benefit – IRC §
132(f)(2)
|
$300
|
$315
|
|
Adoption – Adoption credit or exclusion from
income (i) amount and (ii) AGI phaseout – IRC §§ 23(a)(3) & 137(a)(2)
|
(i) $15,950,
(ii)
$239,230 – $279,230
|
(i) $16,810,
(ii) $252,150 – $292,150 |
|
LTC Deduction Limit – Long-term care premium
deduction limits for individuals (i) age 40 or less, (ii) age 41-50, (iii)
age 51-60, (iv) age 61-70 and (v) over age 70 – IRC § 213(d)(10)
|
(i) $480, (ii) $890,
(iii) $1,790, (iv)
$4,770 & (v) $5,960
|
(i) $470,
(ii) $880, (iii) $1,760, (iv) $4,700 & (v) $5,880
|
|
Social Security Adjustments
|
|
Taxable Wage Base – the taxable wage base
subject to FICA (OASDI) tax (SSA Oct. 2023 COLA Fact Sheet)
|
$160,200
|
$168,600
|
|
SS Tax up to Taxable Wage Base – Social
Security (OASDI) tax up to taxable wage base (double for self-employed)
|
6.2%
|
6.2%
|
|
Medicare Tax – Medicare tax and no cap on wages (plus 0.9% Medicare tax for wages in excess of
$250,000 (joint filers) / $200,000 (single))
|
1.45%
|
1.45%
|
|
SS COLA – Social Security cost of living
increase
|
8.7%
|
3.2%
|
|
Sample Penalty Adjustments
|
|
DOL Penalties – Sample DOL penalties per
day for
(i) failure to file annual report (Form 5500) – ERISA §
502(c)(2) (originally $1,000 per day), or
(ii) failure to provide blackout or diversification notice – ERISA § 502(c)(7) (originally $100
per day)
|
(i) $2,586
(i) $164
|
TBA
|
