The IRS recently announced benefit plan limit changes for 2023. Many employee benefits are subject to annual dollar limits which are adjusted for inflation each year. However, due to decades-high inflation, many limits were increased more than usual for 2023. Common plans affected are health savings accounts (HSAs), high deductible health plans (HDHPs), and 401(k) plans. Below we illustrate common limits and how they are affected in the coming year. Be certain to review your company’s benefit plan limits and adjust as needed.
All limits are yearly unless indicated otherwise.
HSA Contribution
Limit | 2023 | 2022 | Change |
Self-only | $3,850 | $3,650 | ↑ $200 |
Family | $7,750 | $7,300 | ↑ $450 |
Catch-up Contribution | $1,000 | $1,000 | none |
HDHP Definition
Limit | 2023 | 2022 | Change |
Minimum deductible, self-only | $1,500 | $1,400 | ↑ $100 |
Minimum deductible, family | $3,000 | $2,800 | ↑ $200 |
Maximum out of pocket, self-only | $7,500 | $7,050 | ↑ $450 |
Maximum out of pocket, family | $15,000 | $14,100 | ↑ $900 |
Health Flexible Spending Account (FSA)
Limit | 2023 | 2022 | Change |
Employee pre-tax contributions | $3,050 | $2,850 | ↑ $200 |
Carryover | $610 | $570 | ↑ $40 |
Dependent care tax exclusion | $5,000 ($2,500 if married and filing taxes separately) | $5,000 ($2,500 if married and filing taxes separately) | none |
Transportation Fringe Benefits (Monthly Limits)
Limit | 2023 | 2022 | Change |
Transit pass and vanpooling combined | $300 | $280 | ↑ $20 |
Parking | $300 | $280 | ↑ $20 |
401(k) Contributions
Limit | 2023 | 2022 | Change |
Employee elective deferrals, pre-tax | $22,500 | $20,500 | ↑ $2,000 |
Catch-up contributions, over age 50, SIMPLE plans | $3,500 | $3,000 | ↑ $500 |
Catch-up contributions, over age 50, other plans | $7,500 | $6,500 | ↑ $1,000 |
SIMPLE contribution limit | $15,500 | $14,000 | ↑ $1,500 |
Annual contribution limit | $66,000 | $61,000 | ↑ $5,000 |
- Elective deferral limit: the maximum amount able to be contributed to a retirement plan pre-tax.
- Annual contribution limit: the maximum amount able to be contributed to a retirement plan.
Adoption Assistance
Limit | 2023 | 2022 | Change |
Tax exclusion | $15,950 | $14,890 | ↑ $1,060 |
Plan Limits
Limit | 2023 | 2022 | Change |
Annual benefit limit | $265,000 | $245,000 | ↑ $20,000 |
Annual compensation limit | $330,000 | $305,000 | ↑ $25,000 |
Key employee compensation minimum | $215,000 | $200,000 | ↑ $15,000 |
Highly compensated employee minimum | $150,000 | $135,000 | ↑ $15,000 |
- Annual benefit limit: maximum benefit able to be paid to an employee.
- Annual compensation limit: maximum benefit able to be considered in calculating contribution allocations
- Key employee compensation minimum: compensation level for determining key employee status for top-heavy plan testing.
- Highly compensated employee minimum: compensation level for determining highly compensated employee status for nondiscrimination testing.
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This article has been prepared for informational purposes only and is not legal advice. This information does not create an attorney-client or similar relationship. You should consult with your legal counsel if you have a legal matter requiring attention.
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