2026 Annual Limits Announced
The IRS recently released inflation-adjusted limitations that apply to various employee benefits in 2026.
Retirement Plan Dollar Limitations
The Internal Revenue Service recently announced the dollar limits that will apply to retirement plans during 2026. Below are some of the limits for 2025 and the limits for 2026:
Elective Deferral Limit for 401(k), 403(b) and 457 Plans
2025 Limit: $23,500
2026 Limit: $24,500
General Catch-Up Contribution Limit (age 50 and over) for 401(k), 403(b) and 457 Plans
2025 Limit: $7,500
2026 Limit: $8,000
Special Catch-Up Contribution Limit (age 60-63) for 401(k), 403(b) and 457 Plans
2025 Limit: $11,250
2026 Limit: $11,250 (unchanged)
Mandatory Roth Catch-Up Wage Threshold
2025 Limit: $145,000
2026 Limit: $150,000
Note: The mandatory Roth catch-up wage threshold used to determine whether an individual’s catch-up contributions to an applicable employer plan is based upon the employee’s FICA wages during the prior calendar year. Therefore, in determining whether the threshold is exceeded for 2026, the participant’s FICA wages during 2025 and the FICA wages limit for 2025 are used.
Maximum Compensation Limit for Qualified Retirement Plans
2025 Limit: $350,000
2026 Limit: $360,000
Annual Additions Limit for Defined Contribution Plans
2025 Limit: $70,000
2026 Limit: $72,000
Annual Benefit Limit for Defined Benefit Plans
2025 Limit: $280,000
2026 Limit: $290,000
Annual Compensation for Classification of Highly Compensated Employees
2025 Amount: $160,000
2026 Amount: $160,000 (unchanged)
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 2026, the participant’s compensation during the 2025 plan year and the compensation limit for the 2025 plan year are used.
Annual Compensation for Classification of a Key Employee
2025 Limit: $230,000
2026 Limit: $235,000
HSA Dollar Limitations
The IRS recently announced increases in the dollar limits that apply to HSAs in 2026:
Annual HSA Contribution Limit
2025 Limit: $4,300 for self-only ($8,550 for family) HDHP coverage
2026 Limit: $4,400 for self-only ($8,750 for family) HDHP coverage
HSA Catch-Up Contribution Limit (for individuals age 55 or older)
2025 Limit: $1,000
2026 Limit: $1,000 (unchanged)
Minimum Annual HDHP Deductible
2025 Limit: $1,650 for self-only ($3,300 for family) HDHP coverage
2026 Limit: $1,700 for self-only ($3,400 for family) HDHP coverage
Maximum HDHP Out-of-Pocket Expense Limit
2025 Limit: $8,300 for self-only ($16,600 for family) HDHP coverage
2026 Limit: $8,500 for self-only ($17,000 for family) HDHP coverage
Medical FSA Limitation and Maximum Carryover Amount
For 2025, the employee salary reduction contribution dollar limitation was $3,300. For 2026, the employee salary reduction contribution dollar limitation will increase to $3,400. Additionally, for 2025, the maximum carryover amount was $660. For 2026, the maximum carryover amount will increase from $660 to $680.
Adoption Assistance Dollar Limitations
For tax years beginning in 2026, the maximum amount that can be excluded from an employee’s gross pay for the adoption of a child with special needs will be $17,670, up from $17,280 in 2025. For tax years beginning in 2026, the limit is the same for amounts paid or expenses incurred by an employer under an adoption assistance program.
Qualified Transportation Fringe Benefit Dollar Limitations
For tax years beginning in 2026, the monthly limit for transportation in a commuter highway vehicle and any transit pass will increase to $340, up from $325 in 2025. The monthly limit for qualified parking benefits will also increase to $340 per month for 2026, up from $325.
Social Security Taxable Wage Base
The Social Security Administration recently announced that the maximum amount of earnings subject to Social Security tax will increase from $176,100 in 2025 to $184,500 in 2026.
Questions
If you have any questions, please contact a member of the Miller Johnson Employee Benefits and Executive Compensation practice group.