On October 21, 2022, the Internal Revenue Service (IRS) released Notice 2022-55, which sets forth the 2023 cost-of-living adjustments affecting dollar limits on benefits and contributions for qualified retirement plans. Earlier this year, the health savings account (HSA) and high deductible health plan (HDHP) annual deductible and out-of-pocket expense adjustments were announced in Revenue Procedure 2022-24, and the health care FSA adjustments were announced in Revenue Procedure 2022-38. In addition, the Social Security Administration announced its cost-of-living adjustments for 2023 in October 2022, which includes a change to the taxable wage base.
The following chart summarizes the 2023 limits for benefit plans. The 2022 limits are provided for reference.
| 2022 | 2023 | |
| Elective Deferral Limit 401(k), 403(b), 457(b) | $20,500 | $22,500 |
| Catch-up Limit (age 50+) | $6,500 | $7,500 |
| Defined Benefit Limit | $245,000 | $265,000 |
| Defined Contribution Limit | $61,000 | $66,000 |
| Dollar Limit – Highly Compensated Employees | $135,000 | $150,000 |
| Officer – Key Employee | $200,000 | $215,000 |
| Annual Compensation Limit | $305,000 | $330,000 |
| SEP Eligibility Compensation Limit | $650 | $750 |
| SIMPLE Deferral Limit | $14,000 | $15,500 |
| SIMPLE Catch-up Limit (age 50+) | $3,000 | $3,500 |
| Social Security Taxable Wage Base | $147,000 | $160,200 |
| ESOP 5 Year Distribution Extension Account Minimum | $1,230,000 | $1,330,000 |
| Additional Amount for 1-Year Extension | $245,000 | $265,000 |
| HSA (Self/Family) Maximum Annual Contribution | $3,650/$7,300 | $3,850/$7,750 |
| HDHP Minimum Deductible Limits | $1,400/$2,800 | $1,500/$3,000 |
| Out-of-pocket Expense Annual Maximum | $7,050/$14,100 | $7,500/$15,000 |
| Medical FSA Maximum Annual Contribution | $2,850 | $3,050 |
For more information on the 2023 cost-of-living adjustments, please contact Lisa Rippey, Jeff Cairns, or the Stinson LLP contact with whom you regularly work.