IRS announces employee benefit plan limits for 2022


The IRS and the Social Security Administration announced cost-of-living adjustments to dollar limits for various employer-sponsored retirement and welfare plans and the Social Security Salary Base for 2022. table below compares applicable dollar limits for certain employee benefits. programs and the Social Security salary base for 2021 and 2022.*

Annual compensation limit $290,000 $305,000
401(k), 403(b) and 457(b) contributions before tax $19,500 $20,500
Catch-up contributions (if age 50 or over) $6,500 $6,500
Highly paid employee threshold $130,000 $135,000
Compensation threshold for key salaried executives $185,000 $200,000
Annual defined benefit plan benefits and accrual limit $230,000 $245,000
Defined contribution plan annual contribution limit $58,000 $61,000
Employee stock ownership plan (ESOP) ceiling to determine the extension of the five-year general distribution period $230,000 $245,000
ESOP limit for determining the maximum account balance subject to the five-year general distribution period $1,165,000 $1,230,000
Flexible Health Spending Accounts
Maximum salary reduction limit $2,750 $2,850
FSA Health Deferral Limit $550 $570
Flexible Spending Accounts for Dependent Care±
If the employee is married and filing a joint return or if the employee is a single parent $10,500 $5,000
In employee is married but files separately $5,250 $2,500
Reimbursement methods for excepted health services $1,800 $1,800
Eligible transportation benefits and eligible parking (monthly limit) $270 $280
High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA)
HDHP – Maximum annual disbursement limit (excluding bonuses):
Coverage for self only $7,000 $7,050
Family coverage $14,000 $14,100
Coverage for self only $1,400 $1,400
Family coverage $2,800 $2,800
Coverage for self only $3,600 $3,650
Family coverage $7,200 $7,300
Catch-up contributions (55 years or older)± $1,000 $1,000
Social Security Maximum Taxable Earnings $142,800 $147,000

Plan sponsors should update payroll and plan administration systems for the 2022 cost-of-living adjustments and should incorporate the new limits into relevant member communications, such as open enrollment materials and summary descriptions of the schemes.

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