401(k) Plan Limits
|
Defined Contribution Plans |
2021 |
2020 |
Change |
Maximum employee elective deferral
|
$19,500 | $19,500 | no change
|
Employee catch-up contribution (if age 50 or older by year-end) 1
|
$6,500 | $6,500 | no change
|
Maximum employee elective deferral plus catch-up contribution (if age 50 or older by year end)
|
$26,000 | $26,000 | no change
|
Defined contribution maximum limit, all sources (employee + employer)
2
|
$58,000 | $57,000 | +$1,000 |
Defined contribution maximum limit (if age 50 or older by year end); maximum contribution all sources plus catch-up
|
$64,500 | $63,500 | +$1,000 |
Employee compensation limit for calculating contributions
|
$290,000 | $285,000 | +$5,000 |
Key employees' compensation threshold for nondiscrimination testing 3
|
$185,000 | $185,000
| no change
|
Highly compensated employees’ threshold for nondiscrimination testing 4
|
$130,000 | $130,000 | no change
|
Source: IRS Notice 2020-79.
HSA and HDHP Limits
|
Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs) |
2021 |
2020 |
Change |
HSA contribution limit
(employer + employee) |
Self-only: $3,600
Family: $7,200 | Self-only: $3,550
Family: $7,100 | Self-only: +$50
Family: +$100 |
HSA catch-up contributions
(age 55 or older) |
$1,000
| $1,000
| no change
|
HDHP minimum deductibles
|
Self-only: $1,400
Family: $2,800 | Self-only: 1,400
Family: $2,800 | no change
no change |
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)
|
Self-only: $7,000
Family: $14,000 | Self-only: $6,900
Family: $13,800 | Self-only: +100
Family: +$200 |
Source: IRS Notice 2020-32.
Health FSA Limits
Health Care Flexible Spending Accounts (Health FSAs) and Limited-Scope (Vision/Dental) FSAs
|
2021 |
2020 |
Change |
Maximum salary deferral
|
$2,750 | $2,750
| no change |
Maximum rollover amount
|
$550 | Raised to $550 from $500 midyear 1
| no change from adjusted amount
|
1 IRS Notice 2020-33, issued May 12, 2020.
Source: IRS Revenue Procedure 2020-45.
Update: The
Consolidated Appropriations Act signed into law at the end of 2020 allows employers that sponsor health FSAs or dependent care FSAs the option of permitting participants to roll over all unused amounts in these accounts from 2020 to 2021 and from 2021 to 2022.
QSEHRA
Limits
|
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) |
2021 |
2020 |
Change |
Maximum payments and reimbursements through the QSEHRA
|
Self-only: $5,300
Family: $10,700 | Self-only: $5,250
Family: $10,600 | Self-only: +$50
Family: +$100 |
Source: IRS Revenue Procedure 2020-45.
Commuter Transit and Parking Limits
Qualified Transportation Benefit Tax Exclusion (monthly limits) |
2021 |
2020 |
Change |
Transit passes and van pool services (employer + employee)
|
$270 | $270
| no change
|
Qualified parking
|
$270 | $270
| no change
|
Source: IRS Revenue Procedure 2020-45.
Earnings Subject to Social Security Payroll Tax
Social Security (FICA) Payroll Tax |
2021 |
2020 |
Change |
Maximum earnings subject to Social Security 12.4% FICA payroll tax (6.2% paid by employer and 6.2% paid by employee)
|
$142,800 | $137,700
| +$5,100
|
Source: Social Security Administration.
Visit SHRM's resource page on
Open Enrollment.
Need help with legal questions? Check out the new
SHRM LegalNetwork.