However, because neither plan allows catch-up contributions, the employee cannot contribute more than $22,500 to either plan. The employee could elect to contribute a combined total of $27,000 ($20,500 plus $6,500 catch-up contributions) via salary deferrals to the plans. Both plans allow employees to contribute the annual maximum salary deferral limit ($20,5) but neither plan allows catch-up contributions ($7,5). An example of this situation is an employee, aged 50, who participates in both a 401(k) plan and a 403(b) plan of unrelated employers. However, the employee cannot exceed the annual deferral limit in any one plan. If an employee can make salary deferrals under plans of unrelated employers, he or she can contribute a total of the annual deferral limit plus the amount of the catch-up contribution limit even if none of the plans allow catch-up contributions. The employee makes a valid salary deferral election that includes the amount of the catch-up contributions before the end of the calendar year.The employee is age 50 or older at any time during the calendar year.401(k) (not SIMPLE), 403(b), governmental 457(b) and SARSEP plans: $7,500 in 2023Īn employee who is eligible to make salary deferrals under a 401(k), SIMPLE IRA, 403(b), SARSEP or a governmental 457(b) plan may be able to make additional salary deferrals up to the catch-up contribution limit every year provided that:.Your annual compensation minus your salary deferrals that are not catch-up contributionsįollowing are the catch-up contribution dollar limits:.The catch-up contribution dollar limit applicable to your plan, as described below.The maximum amount of additional elective deferrals that you can contribute is equal to the smaller of the following amounts: What is the limit for catch-up contributions? The plan-imposed limit on elective deferrals, if any. The plan’s actual deferral percentage (ADP) test limit, if applicable.Any statutory limit, such as the annual limit on regular elective deferrals (for example, $20,500 in 2022 for non-SIMPLE plans).For example, you can’t make catch-up contributions for 2021 with 2020 wages.Ī plan will not treat salary deferrals as catch-up contributions until they exceed the least of the following limits: A deferral is counted for a calendar year only if the wages subject to the deferral election would otherwise have been paid or made available to the employee during the year. Like regular elective deferrals, catch-up contributions can be pre-tax elective deferrals or designated Roth contributions, as chosen by the employee.Įlective deferrals are counted for both the regular annual deferral limit and the catch-up contribution limit on the basis of the calendar year. Catch-up contributions are salary deferrals (also referred to as “elective deferrals”) that employees age 50 or older can make in addition to their regular retirement plan contributions.
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