iThe IRS has released the 2023 cost-of-living adjustments for limits on employee benefits with some adjustments to the 2023 rates including minor increases to the maximum contributions allowed under Code Section 415 for defined contribution plans (e.g. 401(k)), maximum compensation used in determining benefits, and the taxable wage base. Below is an updated chart on the 2023 limits.
Limits for 2023 – Qualified Plans
|
Limitation |
2023 |
2022 |
Change? |
|
Elective Deferrals (401(k) and 403(b)) Pre-Tax Contributions; 457(b), 402(g)(3)) |
$22,500 |
$20,500 |
Yes |
|
Catch-Up Contributions – 401(k), 403(b), 457(b), SARSEP Plans |
$7,500 |
$6,500 |
Yes |
|
Highly Compensated Employee (HCE) – 414(q) |
$150,000 |
$135,000 |
Yes |
|
Annual Compensation Limit – 401(a)(17), 404(l), 408(k)(3)(C), 408(k)(6)(D)(ii) |
$330,000 |
$305,000 |
Yes |
|
Key Employee – 416(i)(1)(A)(i), Top-Heavy and 409A Specified Employee |
$215,000 |
$200,000 |
Yes |
|
Defined Contribution Plan – Total Annual Contributions – 415(c) |
$66,000 |
$61,000 |
Yes |
|
Defined Benefit Plan – Maximum Benefit – 415(b) |
$265,000 |
$245,000 |
Yes |
|
ESOP – Determining the Length of the General Five-Year Distribution Period |
$265,000 |
$245,000 |
Yes |
|
ESOP – Maximum Account Balance subject to Five-Year Distribution Period |
$1,330,000 |
$1,230,000 |
Yes |
Limits for 2023 – Tax Withholding Rates
|
Limitation |
2023 |
2022 |
Change? |
|
Taxable Wage Base |
$160,200 |
$147,000 |
Yes |
Limits for 2023 – High Deductible Plans, Health Savings Account and FSAs
|
Limitation |
2023 |
2022 |
Change? |
|
High Deductible Health Plan – IRS Limits (Self/Family)
|
$1,500/$3,000 $7,500/$15,000 |
$1,400/$2,800 $7,050/$14,100 |
Yes Yes |
|
HSA Contribution Limit (Individual/Family) |
$3,850/$7,750 |
$3,650/$7,300 |
Yes |
|
HSA Contribution Catch-Up Limit |
$1,000 |
$1,000 |
No |
|
Flexible Spending Account (FSA) – Health Care – Employee Contribution |
$3,050 |
$2,850 |
Yes |
|
Flexible Spending Account (FSA) – Health Care – Maximum Carryover |
$610 |
$570 |
Yes |
|
Flexible Spending Account (FSA) – Dependent Care – Employee Contribution |
$5,000 |
$5,000 |
No |
|
Out-of-Pocket Expenses (ACA) – PHSA §2707(b) Maximum (in-network Essential Health Benefits for Non-Grandfathered Plans)
|
$9,100 $9,100 $18,200 |
$8,700 $8,700 $17,400 |
Yes Yes Yes |
Limits for 2023 – Affordable Care Act
|
Limitation |
2023 |
2022 |
Change? |
|
ACA Affordability Safe-Harbor |
9.12% |
9.61% |
Yes |
Limits for 2023 – Qualified Transportation Fringe Benefit
|
Limitation |
2023 |
2022 |
Change? |
|
Transit Pass, Van Pool |
$300 |
$280 |
Yes |
|
Qualified Parking |
$300 |
$280 |
Yes |
Penalties for 2023 – Affordable Care Act
|
Penalty |
2023 |
2022 |
Change? |
|
No Offer of Coverage |
$2,880 |
$2,750 |
Yes |
|
Offer of Coverage Lacks Minimum Value or Affordability |
$4,320 |
$4,120 |
Yes |
PBGC Premiums for Defined Benefit Pension Plans – 2023
|
Premium |
2023 |
2022 |
Change? |
|
Flat Rate (Per Participant) |
$96 |
$88 |
Yes |
|
Variable Rate for $1,000 of Unfunded Vested Benefits |
$52 |
$48 |
Yes |
|
Per Participant Variable Cap |
$652 |
$598 |
Yes |
