13 November 2025 IRS releases qualified retirement plan limitations for 2026; 401(k) pretax limit increases to $24,500 The dollar limitations for retirement plans and certain other dollar limitations that become effective January 1, 2026, have been released by the IRS in Notice 2025-67. The dollar limitations are adjusted annually for inflation and, consequently, most of them are changed for 2026. Of note, the 2026 pretax limit that applies to elective deferrals to IRC Section 401(k), 403(b) and 457(b) plans increased from $23,500 to $24,500. The 2026 dollar limitation for catch-up contributions for participants aged 50 or over increased from $7,500 to $8,000. Under a change made in SECURE 2.0 Act, a higher contribution limit applies for employees aged 60 through 63. For 2026, this higher catch-up contribution limit is $11,250, unchanged from 2025. (See Tax Alert 2025-2010 for other changes in SECURE 2.0 Act that affect the taxation and reporting of catch-up contributions.) Plan participants may wish to consider the impact of the dollar limitations for 2026 in their overall financial planning. A summary of some of the cost-of-living adjustments for 2025 and 2026 is provided below. Past year limits are also posted on the IRS website in a historical table. Description | 2025 | 2026 | Participant pretax contribution limit for IRC Section 401(k) and 403(b) plans IRC Section 402(g)(1) | $23,500 | $24,500 | Deferral limit for deferred compensation plans of state and local governments and tax-exempts IRC Section 457(e)(15) | $23,500 | $24,500 | Dollar limit for catch-up contributions for participants aged 50 or over for other than a plan described in IRC Section 401(k)(11) or IRC Section 408(p) IRC Section 414(v)(2)(B)(i) | $7,500 | $8,000 | Dollar limit for catch-up contributions for participants who attain age 60, 61, 62 or 63 in 2026 for other than a plan described in IRC Section 401(k)(11) or IRC Section 408(p) IRC Section 414(v)(2)(E)(i) | $11,250 | $11,250 | Roth catch-up wage threshold used to determine whether an individual's catch-up contributions (for other than a plan described in Section 408(k) or (p)) must be designated as Roth contributions IRC Section 414(v)(7) | $145,000 | $150,000 | Dollar limit for catch-up for contributions for participants aged 50 or over in a SIMPLE IRA or a SIMPLE 401(k) IRC Section 414(v)(2)(B)(ii) | $3,500 | $4,000 | Defined benefit plan annual benefit limit1 IRC Section 415(b)(1)(A) | $280,000 | $290,000 | Defined contribution plan contribution limit IRC Section 415(c)(1)(A) | $70,000 | $72,000 | Maximum ESOP account balance subject to a 5-year distribution period/increments for additional year IRC Section 409(o)(1)(C)(ii) | $1,415,000/$280,000 | $1,455,000/$290,000 | Highly-compensated employee dollar threshold IRC Section 414(q)(1)(B) | $160,000 | $160,000 | Definition of key employee in a top-heavy plan — officer compensation threshold IRC Section 416(i)(1)(A)(i) | $230,000 | $235,000 | Annual limit on includible compensation for benefits and allocations2 IRC Sections 401(a)(17), 404(l), 408(k)(3)(C) and 408(k)(6)(D)(ii) | $350,000 | $360,000 | SEP employee participation floor IRC Section 408(k)(2)(C) | $750 | $800 | SIMPLE IRA and SIMPLE 401(k) contribution limit IRC Section 408(p)(2)(E) | $16,500 | $17,000 | Compensation amount for control employees for fringe benefit valuation purposes Treas. Reg. Section 1.61-21(f)(5)(i) and (iii) | $140,000/$285,000 | $145,000/$290,000 |
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Endnotes1 For a participant who separated from service before January 1, 2026, 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 2025, by 1.0288. 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 $535,000 for 2026, up from $520,000 in 2025. | | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: Workforce Tax Services - Employment Tax Advisory Services | | Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor |
Document ID: 2025-2287 |
