Employee Benefit Plan Limits for 2023
Many employee benefits are subject to annual dollar limits that are adjusted for inflation by the IRS each year. The following commonly offered employee benefits are subject to these limits:
- High deductible health plans (HDHPs) and health savings accounts (HSAs);
- Health flexible spending accounts (FSAs);
- 401(k) plans; and
- Transportation fringe benefit plans.
The IRS typically announces the dollar limits that will apply for the next calendar year well before the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration is consistent with the new limits.
This Compliance Overview includes a chart of the inflation-adjusted limits for 2023. Due to high rates of inflation, all of these limits will substantially increase for 2023. Note that there are some benefit limits that are not indexed for inflation, such as the dependent care FSA limit and the catch-up contribution limit for HSAs.
LINKS AND RESOURCES
- IRS Revenue Procedure 2022-24: 2023 limits for HSAs and HDHPs
- IRS Notice 2022-55: 2023 limits for retirement plans
- IRS Revenue Procedure 2022-33: 2023 limits for health FSAs, adoption assistance and transportation fringe benefits
Increased Limits
- HSA contributions
- HDHP limits for minimum deductibles and out-of-pocket maximums
- Health FSA pre-tax contribution limit
- Health FSA carryover limit
- Monthly limits for transportation fringe benefit plans
- Employees’ elective deferrals to 401(k) plans, pre-tax and Roth
- Tax exclusion for adoption assistance benefits
Unchanged Limits
The following limits stay the same from year to year because they are not indexed for inflation:
- Tax exclusion for dependent care FSA benefits
- Catch-up contributions to an HSA
| Limit | 2022 | 2023 | Change |
|
HSA Contribution Limit |
|||
| Self-only | $3,650 | $3,850 | Up $200 |
| Family | $7,300 | $7,750 | Up $450 |
| Catch-up contributions* | $1,000 | $1,000 | No change |
|
HDHP Minimum Deductible |
|||
| Self-only | $1,400 | $1,500 | Up $100 |
| Family | $2,800 | $3,000 | Up $200 |
|
HDHP Out-of-Pocket Maximum |
|||
| Self-only | $7,050 | $7,500 | Up $450 |
| Family | $14,100 | $15,000 | Up $900 |
|
Health FSA |
|||
| Limit on employees’ pre-tax contributions | $2,850 | $3,050 | Up $200 |
| Carryover limit | $570 | $610 | Up $40 |
|
Dependent Care FSA* |
|||
| Tax exclusion | $5,000 ($2,500 if married and filing taxes separately) | $5,000 ($2,500 if married and filing taxes separately) | No change |
|
Transportation Fringe Benefits (Monthly Limits) |
|||
| Transit pass and vanpooling (combined) |
$280 | $300 | Up $20 |
| Parking | $280 | $300 | Up $20 |
|
401(k) Contributions |
|||
| Employee elective deferrals | $20,500 | $22,500 | Up $2,000 |
| Catch-up contributions | $6,500 | $7,500 | Up $1,000 |
| Limit on total contributions | $61,000 | $66,000 | Up $5,000 |
|
Adoption Assistance Benefits |
|||
| Tax exclusion | $14,890 | $15,950 | Up $1,060 |
*Limits that are not adjusted for inflation
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