Insights
IRS Releases 2025 Adjusted Qualified Plan Limitations
Nov 11, 2024The Internal Revenue Service released the cost-of-living adjusted qualified retirement plan and welfare plan limitations effective January 1, 2025. For ease of reference and comparison to prior years, we have placed the adjusted limitations in a table below. For more information, refer to:
- IRS Notice 2024-80
- Rev. Proc. 2024-25
- Rev. Proc 2024-40
- Social Security Administration’s 2025 Cost-of Living Adjustment Fact Sheet~
|
Type of Limitation |
2025 |
2024 |
2023 |
2022 |
2021 |
|
Elective Deferrals 401(k), 403(b) & 457(e)(15) |
$23,500 |
$23,000 |
$22,500 |
$20,500 |
$19,500 |
|
SIMPLE Salary Deferral |
$16,500 |
$16,000 |
$15,500 |
$14,000 |
$13,500 |
|
Catch-Up Deferrals 401(k), 403(b), 457(b), & SARSEP Age 50+ Age 60-63 *Separate rules apply to 457(b)(3) & 402(g) |
$7,500 $11,250
|
$7,500 N/A
|
$7,500 N/A
|
$6,500 N/A
|
$6,500 N/A
|
|
Catch-Up Deferrals to SIMPLE 401(k) or SIMPLE IRA plans: Age 50+ Certain new plan sponsors: Age 60-63 |
$3,500 $3,850 $5,250 |
$3,500 $3,850 N/A |
$3,500 N/A N/A |
$3,000 N/A N/A |
$3,000 N/A N/A |
|
415 Limit: Defined Benefit Plans |
$280,000 |
$275,000 |
$265,000 |
$245,000 |
$230,000 |
|
415 Limit: Defined Contribution Plans |
$70,000 |
$69,000 |
$66,000 |
$61,000 |
$58,000 |
|
401(a)(17) Annual Compensation Limit |
$350,000 |
$345,000 |
$330,000 |
$305,000 |
$290,000 |
|
414(q)(1)(B) Highly Compensated Employee |
$160,000 |
$155,000 |
$150,000 |
$135,000 |
$130,000 |
|
Domestic Abuse Victim Distribution |
The lesser of $10,300 or 50% of the vested accrued benefit |
The lesser of $10,000 or 50% of the vested accrued benefit |
N/A |
N/A |
N/A |
|
Pension Linked Emergency Savings Account |
$2,500 |
$2,500 |
N/A |
N/A |
N/A |
|
Key Employee in Top Heavy Plan (officer) |
$230,000 |
$220,000 |
$215,000 |
$200,000 |
$185,000 |
|
ESOP Maximum Balance Subject to 5-Year Distribution Period |
$1,415,000 |
$1,380,000 |
$1,330,000 |
$1,230,000 |
$1,165,000 |
|
Amount for Lengthening of 5-Year ESOP Distribution Period |
$280,000 |
$275,000 |
$265,000 |
$245,000 |
$230,000 |
|
Taxable Wage Base |
$176,100 |
$168,600 |
$160,200 |
$147,000 |
$142,800 |
|
IRA Contribution Limits Age 0-49 Age 50+ |
$7,000 $8,000 |
$7,000 $8,000 |
$6,500 $7,500 |
$6,000 $7,000 |
$6,000 $7,000 |
|
FICA Tax for Employees & Employers Social Security Component Medicare Component |
7.65% 6.2% 1.45% |
7.65% 6.2% 1.45% |
7.65% 6.2% 1.45% |
7.65% 6.2% 1.45% |
7.65% 6.2% 1.45% |
|
Health Savings Account Limit: single/family Age 55+ / $1,000 catch-up contribution |
$4,300/ $8,550 |
$4,150/ $8,300 |
$3,850/ $7,750 |
$3,650/ $7,300 |
$3,600 $7,200 |
|
Health Flexible Spending Account Limit Optional Carryover Limit[1] |
$3,300 $660 |
$3,200 $640 |
$3,050 $610 |
$2,850 $570 |
$2,750 $550 |
|
Dependent Care Flexible Spending Account Limit: married filing jointly/separately *subject to earned income limits[2] |
$5,000 $2,500 |
$5,000 $2,500 |
$5,000 $2,500 |
$5,000 $2,500 |
$5,000 $2,500 |
|
Additional Medicare Tax Withholding |
0.9% of comp |
0.9% of comp |
0.9% of comp |
0.9% of comp |
0.9% of comp |
[1] See IRS Notice 2021-15 for special rules for plan years ending in 2020 and 2021.
[2] See IRS Notice 2021-26 for special rules for 2021.
This article was co-authored by Julie Wagner
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