On November 4, 2021, the Internal Revenue Service (IRS) released the 2022 dollar limitations that apply to tax-qualified retirement plans. With few exceptions, the 2022 limitations published in Notice 2021-61 have been adjusted upwards. Catch-up contribution maximums and the compensation amount for simplified employee pensions (SEPs) have not changed. The table below lists key 2022 amounts that affect tax-qualified retirement plans, compared to the current amounts.
|
Internal Revenue Code (IRC) or Regulation Section |
2022 |
2021 |
|
Defined benefit plan limit: IRC § 415(b)(1)(A) |
$245,000 |
$230,000 |
|
Defined contribution plan limit: IRC § 415(c)(1)(A) |
$61,000 |
$58,000 |
|
Elective deferral exclusion limitation: IRC § 402(g)(1) |
$20,500 |
$19,500 |
|
Annual compensation limit: |
$305,000 |
$290,000 |
|
Annual simplified employee pension (SEP) compensation limit: IRC § 408(k)(3)(C) |
$305,000 |
$290,000 |
|
Key employee dollar limitation in top-heavy plans: IRC § 416(i)(1)(A)(i) |
$200,000 |
$185,000 |
|
Employee stock ownership plan (ESOP) maximum account balance: IRC § 409(o)(1)(C)(ii) |
$1,230,000 |
$1,165,000 |
|
ESOP dollar amount to determine lengthening of five-year distribution period: IRC § 409(o)(1)(C)(ii) |
$245,000 |
$230,000 |
|
Highly compensated employee limitation: IRC § 414(q)(1)(B) |
$135,000 |
$130,000 |
|
Catch-up contributions limitation: |
$6,500 |
$6,500 |
|
Savings incentive match plan for employees (SIMPLE) catch-up
contributions limitation: |
$3,000 |
$3,000 |
|
SEP compensation amount: IRC § 408(k)(2)(C) |
$650 |
$650 |
|
SIMPLE contribution limit: IRC § 408(p)(2)(E) |
$14,000 |
$13,500 |
|
Deferral limitation: IRC § 457(e)(15) |
$20,500 |
$19,500 |
|
Social Security tax wage base |
$147,000 |
$142,800 |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
