Employee Benefit Plan Limits for 2023
Many employee benefits are subject to annual dollar limits that are adjusted for inflation by the IRS each year. The following commonly offered employee benefits are subject to these limits:
- High deductible health plans (HDHPs) and health savings accounts (HSAs);
- Health flexible spending accounts (FSAs);
- 401(k) plans; and
- Transportation fringe benefit plans.
The IRS typically announces the dollar limits that will apply for the next calendar year well before the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration is consistent with the new limits.
Links and Resources
- IRS Revenue Procedure 2022-24: 2023 limits for HSAs and HDHPs
- IRS Notice 2022-55: 2023 limits for retirement plans
- IRS Revenue Procedure 2022-33: 2023 limits for health FSAs, adoption assistance and transportation fringe benefits
This Compliance Overview includes a chart of the inflation-adjusted limits for 2023. Due to high rates of inflation, all of these limits will substantially increase for 2023.
- HSA contributions
- HDHP limits for minimum deductibles and out-of-pocket maximums
- Health FSA pre-tax contribution limit
- Health FSA carryover limit
- Monthly limits for transportation fringe benefit plans
- Employees’ elective deferrals to 401(k) plans, pre-tax and Roth
- The tax exclusion for adoption assistance benefits