On November 1st, 2023, The Internal Revenue Service (IRS) announced the new 401(k) plan limits for 2024 in Notice 2023-751 Here are the highlights that employers should be aware of:
|401k Plan Limits||2024||2023||Difference|
|Maximum employee elective deferral (for ages 49 and younger)||$23,000||$22,500||+$500|
|Employee catch-up contributions (for ages 50 and older)||$7,500||$7,500||$0|
|Maximum employee elective deferral (for ages 50 and older)||$30,500||$30,000||+$500|
|Maximum employer + employee limit (for ages 49 or younger)||$69,000||$66,000||+$3,000|
|Maximum employer + employee limit (for ages 50 and older)||$76,500||$73,500||+$3,000|
|Maximum employee compensation limit||$345,000||$330,000||+$15,000|
|Highly Compensated Employee Compensation Limitation||$155,000||$150,000||+$5,000|
Details on other retirement-related cost-of-living adjustments for 2024 can be found in the IRS Notice 2023-752
Employer Next Steps
As employers prepare for the 2024 plan year, they should ensure any plan materials and participant communications reflect these new limits. Additionally, employers will want to confirm that their 401(k) plan comply with these limits when processing contributions and testing for discrimination issues, where applicable.
- 2024 Limitations Adjusted as Provided in Section 415(d), etc https://www.irs.gov/pub/irs-drop/n-23-75.pdf
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DISCLAIMER: This communication is intended for information purposes only and should not be construed as legal or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable to your situation. This information and any questions as to your specific circumstances should be reviewed with legal counsel and/or a tax professional.