IRS Issues 415 and 401 Limits for 2023
IRS issues notice 2022-55 with adjusted limits for 2023
Monday, October 31, 2022

Section: News Articles

On October 21, the Internal Revenue Service announced its annual cost of living adjustments for calendar year 2023. Importantly for retirement plan sponsors, administrators, and participants, certain plan limits are increasing from the 2022 limits due to inflationary changes in the cost-of-living index. For example, the overall defined benefit annual limitation (Internal Revenue Code (“IRC”) §415(b)) increased to $265,000 (up from $245,000), the overall defined contribution annual limitation (IRC §415(c)) increased to $66,000 (up from $61,000), the annual compensation limit (IRC § 401(a)(17), IRC § 404(l), IRC § 408(k)(3)(C) and IRC § 408(k)(6)(D)(ii)) increased to $330,000 (up from $305,000), the limitation on the exclusion for elective deferrals (IRC § 402(g)(1)) increased to $22,500 (up from $20,500)), and the catch-up deferral for people aged 50 and older (IRC § 414(v)(2)(B)(i)) increased to $7,500 (up from $6,500). Notably, the increases to the IRC § 415(b) defined benefit annual limitation, the IRC § 415(c) defined contribution annual limitation, the IRC § 401(a)(17) annual compensation limitation, and the IRC § 414(v)(2)(B)(i) catch-up deferral for people aged 50 and older are the largest increases in recent years.

For more information, see Notice 2022-55.
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