Regulatory Updates

2022 Retirement Savings Limitations Released

The IRS has issued Notice 2021-61, which contains the following 2022 retirement savings limitations.

  • Annual additions under Internal Revenue Code Section (IRC Sec.) 415(c)(1)(A) for defined contribution plans: $61,000 ($58,000 for 2021)
  • Annual additions under IRC Sec. 415(b)(1)(A) for defined benefit pension plans: $245,000 ($230,000 for 2021)
  • Annual deferral limit (402(g) limit) for 401(k), 403(b) and 457(b) plans: $20,500 ($19,500 for 2021)
  • Catch-up contributions to 401(k), 403(b), and 457(b) plans: $6,500 (unchanged)
  • Annual deferral limit for SIMPLE IRA and SIMPLE 401(k) plans: $14,000 ($13,500 for 2021)
  • Catch-up contributions for SIMPLE IRA and SIMPLE 401(k) plans: $3,000 (unchanged)
  • IRC Sec. 401(a)(17) compensation cap: $305,000 ($290,000 for 2021)
  • Highly compensated employee (HCE) definition income threshold: $135,000 ($130,000 for 2021)
  • Top-heavy determination key employee definition income threshold: $200,000 ($185,000 for 2021)
  • SEP plan employee income threshold for benefit eligibility: $650 (unchanged)
  • Taxable wage base (TWB), as noted in the October 13 announcement, increases to $147,000 for 2022 from $142,800; used in some integrated allocation formulas
  • Qualifying longevity annuity contract (QLAC) amount excludible from required minimum distribution determinations: $145,000 ($135,000 for 2021)

Annual limitations for IRA contributions, deductibility for those who are active participants in employer plans, and those seeking an income tax credit for retirement saving contributions, have slightly different indices than are used for determining cost-of-living adjustments (COLAs) in employer plans. Following are the limitations for 2022.

  • Traditional and Roth IRA contributions: $6,000 (unchanged)
  • Traditional and Roth IRA catch-up contributions: $1,000 (not subject to COLA adjustments)
  • Traditional IRA deductibility phase-out for single taxpayers participating in employer plans rises to $68,000–$78,000 (was $66,000–$76,000)
  • Traditional IRA deductibility phase-out for married joint filing taxpayers participating in employer plans rises to $109,000–$129,000 (was $105,000–$125,000)
  • Traditional IRA deductibility phase-out for married with spouse an active participant in employer plan rises to $204,000–$214,000 (was $198,000–$208,000)
  • Roth IRA income limitation for determining maximum contribution for married joint filers: phase-out range rises to $204,000–$214,000 (was $198,000–$208,000)
  • Roth IRA income limitation for determining maximum contribution for single filers and heads-of-households: phase-out range rises to $129,000–$144,000 (was 125,000–$140,000)

Taxpayers who make contributions to IRAs or deferral-type employer-sponsored retirement plans of up to $2,000 may be eligible for a special income tax credit (the “saver’s credit”) of 10, 20, or 50 percent of the amount contributed, depending on their income.

For joint filers, the maximum adjusted gross income level for

  • the 50 percent tax credit is $41,000;
  • the 20 percent tax credit is $44,000; and
  • the 10 percent tax credit is $68,000.

For head of household filing status, the maximum adjusted gross income level for

  • the 50 percent tax credit is $30,750;
  • the 20 percent tax credit is $33,000; and
  • the 10 percent tax credit is $51,000.

For all other filing statuses, the maximum adjusted gross income level for

  • the 50 percent tax credit is $20,500;
  • the 20 percent tax credit is $22,000; and
  • the 10 percent tax credit is $34,000.