The Internal Revenue Service announced cost-of-living adjustments (COLAs) affecting dollar limitations for health savings accounts, pension plans and other retirement-related items for the 2021 tax year. See the chart below for further details.
The highlights of limitations that changed from 2020 to 2021 include the following:
- The 415(c) contribution limit applicable to defined contribution retirement plans increased from $57,000 to $58,000.
- The 401(a)(17) annual compensation limit applicable to retirement plans increased from $285,000 to $290,000.
See the chart below for further details for the new 2021 limits, as well as those for recent tax years.