2024 Annual Limits Announced
The IRS recently released inflation-adjusted limitations that apply to various employee benefits in 2024.
Medical FSA Limitation and Maximum Carryover Amount for 2024
For 2023, the employee salary reduction contribution dollar limitation was $3,050. For 2024, the employee salary reduction contribution dollar limitation is projected to increase to $3,200. Additionally, for 2023, the maximum carryover amount was $610. For 2024, the maximum carryover amount is projected to increase to $640.
Adoption Assistance Dollar Limitations for 2024
For tax years beginning in 2024, the maximum amount that can be excluded from an employee’s gross pay for the adoption of a child with special needs is projected to be between $16,500 and $17,000, up from $15,950 in 2023. For tax years beginning in 2024, the limit is expected to be the same for amounts paid or expenses incurred by an employer under an adoption assistance program.
Retirement Plan Dollar Limitations for 2024
The Internal Revenue Service recently announced the dollar limits that will apply to retirement plans during 2024. Below are some of the limits for 2023 and the limits for 2024:
Elective Deferral Limit for 401(k), 403(b) and 457 Plans
2023 Limit: $22,500
2024 Limit: $23,000
Catch-Up Contribution Limit for 401(k), 403(b) and 457 Plans
2023 Limit: $7,500
2024 Limit: $7,500 (unchanged)
Maximum Compensation Limit for Qualified Retirement Plans
2023 Limit: $330,000
2024 Limit: $345,000
Annual Additions Limit for Defined Contribution Plans
2023 Limit: $66,000
2024 Limit: $69,000
Annual Benefit Limit for Defined Benefit Plans
2023 Limit: $265,000
2024 Limit: $275,000
Annual Compensation for Classification of Highly Compensated Employees
2023 Amount: $150,000
2024 Amount: $155,000
Note: An employee is a highly compensated employee (HCE) based upon the employee’s compensation during the prior plan year. Therefore, in determining whether an employee is an HCE for a plan year beginning during 2024, the participant’s compensation during the 2023 plan year and the compensation limit for the 2023 plan year are used.
Annual Compensation for Classification of a Key Employee
2023 Limit: $215,000
2024 Limit: $220,000
HSA Dollar Limitations for 2024
The IRS recently announced increases in the dollar limits that apply to HSAs in 2024:
Annual HSA Contribution Limit
2023 Limit: $3,850 for self-only ($7,750 for family) HDHP coverage
2024 Limit: $4,150 for self-only ($8,300 for family) HDHP coverage
HSA Catch-Up Contribution Limit (for individuals age 55 or older)
2023 Limit: $1,000
2024 Limit: $1,000 (unchanged)
Minimum Annual HDHP Deductible
2023 Limit: $1,500 for self-only ($3,000 for family) HDHP coverage
2024 Limit: $1,600 for self-only ($3,200 for family) HDHP coverage
Maximum HDHP Out-of-Pocket Expense Limit
2023 Limit: $7,500 for self-only ($15,000 for family) HDHP coverage
2024 Limit: $8,050 for self-only ($16,100 for family) HDHP coverage
Qualified Transportation Fringe Benefit Dollar Limitations for 2024
For tax years beginning in 2024, the monthly limit for transportation in a commuter vehicle and/or transit passes is projected to increase to $315, up from $300 in 2023. The monthly limit for qualified parking benefits is also projected to increase to $315 per month for 2024, up from $300.
Social Security Taxable Wage Base for 2024
The Social Security Administration recently announced that the maximum amount of earnings subject to Social Security tax will increase from $160,200 in 2023 to $168,600 in 2024.
If you have any questions, please contact a member of the Miller Johnson employee benefits practice group.