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November 9, 2021

IRS releases the qualified retirement plan limitations for year 2022: 401(k) pretax limit increases to $20,500; catch-up limit unchanged at $6,500

The dollar limitations for qualified retirement and certain non-qualified plans that become effective January 1, 2022 have been released by the IRS in Notice 2021-61.

The dollar limitations adjusted by reference to IRC Section 415(d) are modified annually for inflation and, consequently, most of them are changed for 2022.

Of note, the 2021 pretax limit that applies to elective deferrals to 401(k), 403(b) and most 457(b) plans increased from $19,500 to $20,500. The dollar limitation for catch-up contributions for participants age 50 or over is unchanged at $6,500.

Plan participants in qualified retirement plans will need to consider the impact of the dollar limitations for 2022 in their overall financial planning.

A summary of some of the cost-of-living adjustments applicable to dollar limitations for qualified retirement plans and other items for 2022 are provided below.

Qualified retirement plan limitations (2021 vs. 2022)


2022 Limit

2021 Limit

Participant pretax contribution limit for 401(k) and 403(b) plans

IRC Section 402(g)(1)



Deferral limit for deferred compensation plans of state and local governments and tax-exempts

IRC Section 457(e)(15)



Dollar limitation for catch-up contributions for participants age 50 or over in 401(k), 403(b), governmental 457 plans and Simplified Employee Pensions (SEPs)

IRC Section 414(v)(2)(B)(i)



Dollar limitation for catch-up for contributions for participants age 50 or over in a SIMPLE* IRA or a SIMPLE 401(k)

IRC Section 414(v)(2)(B)(ii)

*(Savings Incentive Match Plan for Employees of Small Employers)



Defined benefit plan limit 1

IRC Section 415(b)(1)(A)

Lesser of $245,000 or 100% of the participant's 3-year high compensation

Lesser of $230,000 or 100% of the participant's 3-year high compensation

Defined contribution plan limit

IRC Section 415(c)(1)(A)

Lesser of $61,000 or 100% of participant's compensation

Lesser of $58,000 or 100% of participant's compensation

Maximum ESOP account balance subject to a 5-year distribution period/increments for additional year

IRC Section 409(o)(1)(C)(ii)



Highly compensated employee dollar threshold

IRC Section 414(q)(1)(B)



Definition of key employee in a top-heavy plan — officer compensation threshold

IRC Section 416(i)(1)(A)(i)



Annual limit on includible compensation for benefits and allocations 2

IRC Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii)



SEP employee participation floor

IRC Section 408(k)(2)(C)



Simple retirement accounts contribution limit

IRC Section 408(p)(2)(E)



Compensation amount of control employees for fringe benefit valuation purposes

Treas. Reg. Section 1.61-21(f)(5)(i) and (iii)




Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (
Compensation & benefits group
   • Christa Bierma (


1 For a participant who separated from service before January 1, 2022, the participant's limitation under a defined benefit plan under IRC Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2021, by 1.0534.

2 For eligible participants in certain governmental plans that allow cost of living adjustments to the compensation limit to be taken into account, that limit is increased to $450,000 for 2022, up from $430,000 in 2021.


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