Earlier this month, the IRS issued 2022 plan limits. You can read the full notice on their website, but we've included the most notable changes to limits on this chart. Most notably, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $20,500, up from $19,500.
The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver's Credit all increased for 2022.
The full updates are below.
Questions? Contact the Robin S. Weingast & Associates team and we can walk you through what these plan limit changes mean for you and your business.
Footnotes: 1. 2022 limits reflect issuance of IRS Notice 2021-61 (November 4, 2021) and the corresponding Social Security Administration News Release (October 13, 2021). 2. 2021 limits reflect issuance of IRS Notice 2020-79, 2020–46 I.R.B. 1014 (November 9, 2020) and the corresponding Social Security Administration News Release (October 13, 2020). 3. This number is only the catch-up available under Code section 414(v). Code sections 457(b)(3) and 402(g) provide separate catch-up rules, which must also be considered in appropriate cases. 4. Beginning in 2013, there is also a 0.9 percent Additional Medicare Tax that applies to an individual’s wages, Railroad Retirement Tax Act compensation, and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately, and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year. 2022 limits reflect issuance of IRS Notice 2021-61 (November 4, 2021) and the corresponding Social Security Administration News Release (October 13, 2021). 2021 limits reflect issuance of IRS Notice 2020-79, 2020–46 I.R.B. 1014 (November 9, 2020) and the corresponding Social Security Administration News Release (October 13, 2020). This number is only the catch-up available under Code section 414(v). Code sections 457(b) (3) and 402(g) provide separate catch-up rules, which must also be considered in appropriate cases. Beginning in 2013, there is also a 0.9 percent Additional Medicare Tax that applies to an individual’s wages, Railroad Retirement Tax Act compensation, and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold 3/3 amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately, and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.
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