Receive CohnReznick insights and event invitations on topics relevant to your business and role.
The IRS has released its 2023 cost-of-living-adjusted limitation amounts for tax-qualified retirement plans and IRAs. Read on for a summary of the most important updates.
Tax-qualified retirement plans
- Defined benefit plan annual accrual limit – increased from $245,000 to $265,000.
- Defined contribution plan annual addition limit – increased from $61,000 to $66,000.
- Elective deferrals annual limit – increased from $20,500 to $22,500.
- Annual compensation limit – increased from $305,000 to $330,000.
- Compensation threshold for top-heavy plan “key employee” status – increased from $200,000 to $215,000.
- Compensation threshold for “highly compensated employee” status – increased from $135,000 to $150,000.
- Dollar limit for catch-up contributions for individuals aged 50 or over – increased from $6,500 to $7,500.
- Contribution limit for SIMPLE retirement accounts – increased from $14,000 to $15,500.
- Annual Section 457(b) plan limit – increased from $20,500 to $22,500.
Traditional IRAs
- Annual maximum deductible amount for traditional IRA contributions – increased from $6,000 to $6,500.
- Dollar amount for determining deductible amount of traditional IRA contributions
- For active participants in an employer retirement plan filing a joint return or as a qualifying widow(er) – increased from $109,000 to $116,000.
- For all others who are active participants in an employer retirement plan (other than married taxpayers filing separate returns) – increased from $68,000 to $73,000.
- If not an active participant in an employer retirement plan but spouse is – increased from $204,000 to $218,000.
- Adjusted gross income phase-out range for determining deductible amount for traditional IRA contributions
- For single individuals and heads of household who are active participants in an employer retirement plan – increased from $68,000-$78,000 to $73,000-$83,000.
- For married couples filing jointly where the spouse who makes the traditional IRA contribution is an active participant in an employer retirement plan – increased from $109,000-$129,000 to $116,000-$136,000.
- For traditional IRA contributions by an individual who is not an active participant in an employer retirement plan but whose spouse is – increased from $204,000-$214,000 to $218,000-$228,000.
Roth IRAs
- Adjusted gross income limit for determining maximum Roth IRA contributions
- If married and filing jointly or if filing as a qualifying widow(er) – increased from $204,000 to $218,000.
- For all others (other than married taxpayers filing separate returns) – increased from $129,000 to $138,000.
- Adjusted gross income phase-out range for contributions to a Roth IRA
- For married couples filing jointly – increased from $204,000-$214,000 to $218,000-$228,000.
- For singles and heads of household – increased from $129,000-$144,000 to $138,000-$153,000.
Close
Contact
Let’s start a conversation about your company’s strategic goals and vision for the future.
Please fill all required fields*
Please verify your information and check to see if all require fields have been filled in.
CohnReznick Tax: Alerts and Webinars
Related services
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.