By Maggie Hayes and Cris Jones
The IRS has issued its annual employee benefit plan limitations for 2021. Key changes, also highlighted in the chart below, include the following:
- Code Section 415(c) maximum annual additions increased from $57,000 to $58,000.
- Compensation limit under Code Section 401(a)(17) increased from $285,00 to $290,000.
- HDHP Out of Pocket Maximum increased from $6,900 to $7,000 for self-only coverage and from $13,800 to $14,000 for family coverage.
- HSA Maximum Contribution Limit increased from $3,550 to $3,600 for self-only coverage and from $7,100 to $7,200 for family coverage.
- All adoption assistance limits and thresholds have increased.
- All QSEHRA and Archer MSA limits increased.
|
2021 |
2020 | 2019 | |
|
401(k) Plan Limits |
|||
| Elective Deferrals | |||
| Maximum Elective Deferrals for 401(k) Plans |
$19,500 |
$19,500 |
$19,000 |
| Maximum Elective Deferrals for SIMPLE 401(k) Plans |
$13,500 |
$13,500 |
$13,000 |
| Maximum Catch-Up Contribution Limits for 401(k) Plans |
$6,500 |
$6,500 |
$6,000 |
| Maximum Catch-Up Contribution Limits for SIMPLE 401(k) Plans |
$3,000 |
$3,000 |
$3,000 |
| Annual Additions | |||
| Code Section 415(c) Limit |
$58,000 |
$57,000 |
$56,000 |
| Compensation | |||
| Code Section 401(a)(17) Limit |
$290,000 |
$285,000 |
$280,000 |
|
Cafeteria Plan Limits |
|||
| Health Flexible Spending Accounts | |||
| Maximum Salary Reduction |
$2,750 |
$2,750 |
$2,750 |
| Maximum Carryover to Next Plan Year | $550 | $550 | $500 |
| Dependent Care Assistance Plan | |||
| Maximum Contribution Amount | $5,000 ($2,500 if married filing separately) | $5,000 ($2,500 if married filing separately) | $5,000 ($2,500 if married filing separately) |
| Deemed Income of Spouse Incapable of Self-Care or Full-Time Student | $250 a month with 1 qualifying individual
$500 a month with 2 or more qualifying individuals |
$250 a month with 1 qualifying individual
$500 a month with 2 or more qualifying individuals |
$250 a month with 1 qualifying individual
$500 a month with 2 or more qualifying individuals |
| Health Savings Account (HSA) | |||
| High Deductible Health Plan (HDHP) Minimum Annual Deductible | $1,400 for self-only
$2,800 for family |
$1,400 for self-only
$2,800 for family |
$1,350 for self-only
$2,700 for family |
| HDHP Out-of-Pocket Maximum | $7,000 for self-only
$14,000 for family |
$6,900 for self-only
$13,800 for family |
$6,750 for self-only
$13,500 for family |
| HSA Maximum Contribution Limit | $3,600 for self-only
$7,200 for family |
$3,550 for self-only
$7,100 for family |
$3,500 for self-only
$7,000 for family |
| HSA Catch-Up Contribution Limit |
$1,000 |
$1,000 |
$1,000 |
|
Highly Compensated Employee (HCE) and Key Employee Threshold *Thresholds are the same across testing and limits for various plans |
|||
| HCE Threshold | $130,000 | $130,000 | $125,000 |
| Key Employee Threshold | $185,000 for officer group
$150,000 for more than 1% owner |
$185,000 for officer group
$150,000 for more than 1% owner |
$185,000 for officer group
$150,000 for more than 1% owner |
| Consumer-Driven Health Care Limits | |||
| Excepted Benefit Health Reimbursement Accounts | |||
| Maximum Newly Available Benefit | $1,800 | $1,800 | N/A |
| Qualified Small Employer Health Reimbursement Account (QSEHRA) Limits | $5,300 for single
$10,700 for family |
$5,250 for single
$10,600 for family |
$5,150 for single
$10,450 for family |
| Archer Medical Savings Accounts (MSAs) | |||
| Contributions Limits – Single |
$1,566 min. $2,340 max. |
$1,527.50 min.
$2,307.50 max. |
$1,527.50 min. $2,275 max. |
| Contribution Limits – Family |
$3,600 min. $5,362.50 max. |
$3,562.50 min.
$5,325 max. |
$3,487.50 min. $5,250 max. |
| Health Plan Deductible – Single |
$2,400 min. $3,600 max. |
$2,350 min.
$3,550 max. |
$2,350 min. $3,500 max. |
| Health Plan Deductible – Family |
$4,800 min. $7,150 max. |
$4,750 min.
$7,100 max. |
$4,650 min. $6,850 max. |
| HDHP Out-of-Pocket Maximum |
$4,800 for single $8,750 for family |
$4,750 for single
$8,650 for family |
$4,650 for single $8,550 for family |
| Fringe Benefits Limits | |||
| Adoption Assistance | |||
| Maximum Exclusion for Employer-Provided Adoption Assistance | $14,400 | $14,300 | $14,080 |
| Maximum Exempt from Phased Reduction of Exclusion | $216,660 | $214,520 | $211,160 |
| Maximum Allowable for Exclusion and Credit | $256,660 | $254,520 | $251,160 |
| Educational Assistance | |||
| Maximum Income Exclusion | $5,250 | $5,250 | $5,250 |
| Transportation Fringe Benefits | |||
| Parking | $270 a month | $270 a month | $265 a month |
| Transit Passes & Vanpooling | $270 a month | $270 a month | $265 a month |
| FICA Taxable Wage Base | |||
| Social Security | |||
| Maximum Taxable Earnings | $142,800 | $137,700 | $132,900 |
| Employer Tax Rate | 6.2% | 6.2% | 6.2% |
| Employee Tax Rate | 6.2% | 6.2% | 6.2% |
| Medicare | |||
| Employer Tax Rate | 1.45% | 1.45% | 1.45% |
| Employee Tax Rate | 1.45% | 1.45% | 1.45% |