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 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.
