Benefit Plan limits for 2024
2024 IRS Limits
Recently, the IRS and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2024. Much has been increased.
Plan sponsors should update payroll and plan administration systems for the 2024 cost-of-living adjustments and incorporate the new limits in relevant participant communications, like open enrollment materials and summary plan descriptions.
For tax years beginning in 2024, the maximum amount that can be excluded from an employee’s gross pay for the adoption of a child with special needs is projected to be between $16,500 and $17,000, up from $15,950 in 2023. For tax years beginning in 2024, the limit is expected to be the same for amounts paid or expenses incurred by an employer under an adoption assistance program.
|
RETIREMENT PLAN LIMITS (guidance link) |
2023 |
Δ |
2024 |
|
Annual compensation limit |
$330,000 |
↑ |
$345,000 |
|
401(k), 403(b) & 457(b) before-tax contributions |
$22,500 |
↑ |
$23,000 |
|
Catch-up contributions (if age 50 or older) |
$7,500 |
= |
$7,500 |
|
Highly compensated employee threshold |
$150,000 |
↑ |
$155,000 |
|
Key employee officer compensation threshold |
$215,000 |
↑ |
$220,000 |
|
Defined benefit plan annual benefit and accrual limit |
$265,000 |
↑ |
$275,000 |
|
Defined contribution plan annual contribution limit |
$66,000 |
↑ |
$69,000 |
|
Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period |
$265,000 |
↑ |
$275,000 |
|
ESOP limit for determining the maximum account balance subject to the general five-year distribution period |
$1,330,000 |
↑ |
$1,380,000 |
|
HEALTH AND WELFARE PLAN LIMITS (guidance link) |
2023 |
Δ |
2024 |
|
Health Flexible Spending Accounts |
|
||
|
Maximum salary reduction limit |
$3,050 |
$3,200 |
|
|
Health FSA Carryover Limit |
$610 |
$640 |
|
|
Dependent Care Flexible Spending Accounts± |
|
||
|
If employee is married and filing a joint return or if the employee is a single parent |
$5,000 |
||
|
In employee is married but filing separately |
$2,500 |
||
|
Excepted Benefit Health Reimbursement Arrangements (EBHRAs) |
$1,950 |
↑ |
$2,100 |
|
Qualified Transportation Fringe Benefit and Qualified Parking (monthly limit) |
$300 |
$315 |
|
|
High-Deductible Health Plans (HDHP) and Health Savings Accounts (HSA) |
|
||
|
HDHP – Maximum annual out-of-pocket limit (excluding premiums): |
|
||
|
Self-only coverage |
$7,500 |
↑ |
$8,050 |
|
Family coverage |
$15,000 |
↑ |
$16,100 |
|
HDHP – Minimum annual deductible: |
|
||
|
Self-only coverage |
$1,500 |
↑ |
$1,600 |
|
Family coverage |
$3,000 |
↑ |
$3,200 |
|
HSA – Annual contribution limit: |
|
||
|
Self-only coverage |
$3,850 |
↑ |
$4,150 |
|
Family coverage |
$7,750 |
↑ |
$8,300 |
|
Catch-up contributions (age 55 or older)± |
$1,000 |
═ |
$1,000 |
|
SOCIAL SECURITY WAGE BASE (guidance link) |
2023 |
Δ |
2024 |
|
Social Security Maximum Taxable Earnings |
$160,200 |
↑ |
$168,600 |
IRS Announces 2024 Employee Benefit Plan Limits (mwe.com)
2024 Annual Limits Announced - Miller Johnson
Commentary by: Raylea Stelmach
Edited by:
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