The IRS has released the 2023 retirement plan contribution limits. Tax year 2023 will contain a significant increase in contribution limits for employees participating in a 401(k) plan. The new maximum 401(k) employee contribution limit is increasing from $20,500 in 2022 to $22,500 in 2023. If you are over the age of 50 there is an additional catch-up contribution limit increase from $6,500 in 2022 to $7,500 in 2023. This nets to a potential $30,000 total 401(k) contribution for those over the age of 50 in tax year 2023.
IRAs and Roth IRAs will also see a significant increase in 2023 retirement plan contribution limits from $6,000 in 2022 to $6,500 in 2023. The catch-up contribution limit for those over the age of 50 will remain unchanged at $1,000. Taxpayers should be prepared to take advantage of these changes as they go into effect tax year 2023. Contact our Tax Department with your questions about the new 2023 retirement plan contribution limits.