IRS Announces 2021 Plan Contribution and Benefit Limits

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.
  2021
2020
2019
2018
Retirement Plans        
Annual Compensation Limits - 401(a)(17)/404(l) 290,000
285,000
280,000
275,000
Elective Deferrals 401(k)/403(b) - 402(g)(1) 19,500
19,500
19,000
18,500
Catch-up Contributions - 414(v)(2)(B)(i) 6,500
6,500
6,000
6,000
457 Elective Deferrals - 457(e)(15) 19,500
19,500
19,000
18,500
Defined Contribution Limits - 415(c)(1)(A) 58,000
57,000
56,000
55,000
Annual Compensation Grandfathered Governmental Plans 430,000
425,000
415,000
405,000
Other        
Highly Compensated Employee Threshold - 414(q)(1)(B) 130,000 130,000
125,000
120,000
Defined Benefit Limits - 415(b)(1)(A) 230,000 230,000
225,000
220,000
Key Employee - 416(i)(1)(A)(i) 185,000 185,000
180,000
175,000
Social Security Taxable Wage Base 142,800 137,700
132,900
128,400
HEALTH SAVINGS ACCOUNTS (HSA)        
HSA Self-only Coverage Contribution Limits - 223(b)(2)(A) 3,600 3,550 3,500 3,450
HSA Family Coverage Contribution Limits - 223(b)(2)(B) 7,200 7,100 7,000 6,900
IRAs        
IRA Contribution Limit - 219(b)(5)(A) 6,000
6,000
6,000
5,500
IRA Catch-Up Contributions - 219(b)(5)(B) 1,000
1,000
1,000
1,000
SEP        
SEP Minimum Compensation - 408(k)(2)(C) 650
600
600
600
SEP Maximum Compensation - 408(k)(3)(C) 290,000
285,000
280,000
275,000
SIMPLE Plans        
SIMPLE Maximum Contributions - 408(p)(2)(E) 13,500
13,500
13,000
12,500
SIMPLE Catch-up Contributions - 414(v)(2)(B)(ii) 3,000
3,000
3,000
3,000
All figures in US dollars.
Source: www.irs.gov
 
1391009