IRS Releases 2026 Cost-of-Living Adjusted Limits for Benefit Plans
The Internal Revenue Service recently announced 2026 dollar limits for qualified retirement plans (including 401(k) plans), deferred compensation plans, and health and welfare plans. Adjustments to certain limits are based on a cost-of-living index.
In addition, the Social Security taxable wage base, which affects qualified retirement plans "integrated" with Social Security, typically adjusts each year. For 2026, the taxable wage base increases to $184,500.
For 2026, most limits increased with the exception of certain catch-up contributions limits, the highly compensated employee compensation amount, the maximum withdrawal amount for emergency expenses, and limits fixed by statute, the latter of which do not adjust based on the cost-of-living. The increased limits for 2026 are highlighted in red below.
Qualified Retirement Plan Limits
|
|
2026 Limit |
2025 Limit |
|
Annual Limit on 401(k)/403(b) Deferral Contributions |
$24,500 |
$23,500 |
|
Annual Limit on 401(k)/403(b) Catch-up Contributions for those age 50-59 or age 64 and older |
$8,000 |
$7,500 |
|
Annual Limit on 401(k)/403(b) Catch-up Contributions for those age 60-63 |
$11,250 |
$11,250 |
|
Prior Year FICA Wage Amount for Determining Participants whose Catch-up Contributions Must be Made as Roth |
$150,000 (FICA wages earned in 2025 to determine highly paid group status in 2026) |
(Not in effect prior to 2026) |
|
Annual Compensation Limit |
$360,000 |
$350,000 |
|
Annual Contribution Limit for Defined Contribution Plans |
$72,000 |
$70,000 |
|
Annual Benefit Limit for Defined Benefit Plans |
$290,000 |
$280,000 |
|
Prior Year Compensation Amount for Determining Highly Compensated Employees |
$160,000 |
$160,000 |
|
Key Employee Compensation Limit |
$235,000 |
$230,000 |
|
Limit on Pension-Linked Emergency Savings Accounts (PLESAs) |
$2,600 |
$2,500 |
|
Annual Limit on SIMPLE Contributions |
$17,000 |
$16,500 |
|
Annual Limit on Catch-up Contributions to SIMPLE Plans for those age 50-59 or age 64 and older |
$4,000 |
$3,500 |
|
Annual Limit on Catch-up Contributions to SIMPLE Plans for those age 60 - 63 |
$5,250 |
$5,250 |
|
ESOP Account Balance Limit Subject to 5-Year Distribution Period |
$1,455,000 |
$1,415,000 |
|
Incremental Amount Adding Additional Year(s) to ESOP 5-Year Distribution Period |
$290,000 |
$280,000 |
|
Earnings Threshold for SEP Contribution |
$800 |
$750 |
|
Maximum Domestic Abuse Distribution |
$10,500 |
$10,300 |
|
Maximum Withdrawal Amount for Emergency Expenses |
$1,000 |
$1,000 |
Deferred Compensation Limits
|
|
2026 Limit |
2025 Limit |
|
Annual Limit on 457(b) Contributions |
$24,500 |
$23,500 |
|
Annual Limit on Catch-up Contributions to 457(b) Plans for those age 50-59 or age 64 and older |
$8,000 |
$7,500 |
|
409A Specified Employee Compensation Threshold |
$235,000 |
$230,000 |
|
409A Involuntary Separation Pay Limit |
$720,000 |
$700,000 |
Health and Welfare Plan Limits
|
|
2026 Limit |
2025 Limit |
|
Annual Limit on Salary Reduction Contributions to Health FSA |
$3,400 |
$3,300 |
|
Annual Limit on Health FSA Carryover |
$680 |
$660 |
|
Annual Limit on Salary Reduction Contributions to Dependent Care FSA |
$7,500 if married filing jointly or if single $3,750 if married filing separately |
$5,000 if married filing jointly or if single $2,500 if married filing separately |
|
Annual Limit on HSA Contributions |
$4,400 (EE only) $8,750 (family) |
$4,300 (EE only) $8,550 (family) |
|
Annual Limit on Catch-up Contributions to HSA |
$1,000 |
$1,000 |
|
Annual Minimum Deductible for High Deductible Health Plans |
$1,700 (EE only) $3,400 (family) |
$1,650 (EE only) $3,330 (family) |
|
Annual Limit on High Deductible Health Plan Out-of-pocket Expenses |
$8,500 (EE only) $17,000 (family) |
$8,300 (EE only) $16,600 (family) |
If you have a question about any of these limits and how they apply, or any other employee benefits concerns, please reach out to one of the Davis Wright Tremaine benefits attorneys.