2021 Benefit Limits Announced
News
Hodgson Russ Employee Benefits Newsletter
The Internal Revenue Service has announced the cost of living adjusted dollar limits applicable to benefit plans for 2021 (see IRS Notice 2020-79). The key limits are listed below:
| 2021 Limit | 2020 Limit | |
| 401(k)/403(b)/457 Plan Maximum Elective Deferral | $19,500 | $19,500 |
| 401(k)/403(b)/457 Catch-Up | $6,500 | $6,500 |
| Defined Contribution Maximum Annual Addition | $58,000 | $57,000 |
| Defined Benefit Maximum Annual Pension | $230,000 | $230,000 |
| Qualified Plan Maximum Compensation Limit | $290,000 | $285,000 |
| Highly Compensated Employee | $130,000 | $130,000 |
| IRA Contribution Limit | $6,000 | $6,000 |
| IRA Catch-Up Contributions | $1,000 | $1,000 |
| SIMPLE Limit | $13,500 | $13,500 |
| SIMPLE Catch-Up | $3,000 | $3,000 |
In addition, the Social Security taxable wage base will increase from $137,700 for 2020 to $142,800 for 2021.