Blue Ridge ESOP Associates Industry News

December 2021 - IRS/DOL Corner

Posted by Scott J. Freund, QPA, QKC

Dec 22, 2021 10:03:18 AM

On November 4, 2021, the IRS announced cost of living adjustments affecting qualified retirement plans for 2022. Almost all of the limits increased from 2021 to 2022, some by greater amounts than we have seen in some time.

Selected Limits

2022

2021

401(k) Elective Deferrals 

$20,500

$19,500

401(k) Catch Up Deferrals  

$6,500

$6,500

 

Annual Defined Contribution Limit  

(Section 415) *

$61,000

$58,000

 

Annual Compensation Limit **   

$305,000

$290,000

Highly Compensated Employees

(look-back year calculation)**

 $135,000

 $130,000

 

Key Employee – Officer Threshold* 

$200,000

$185,000

Social Security Wage Base 

$147,000

$142,800

 

ESOP Threshold Balance for  lengthening the 5-year installment period

$1,230,000

$1,165,000

 

Amount for lengthening the 5-year ESOP installment period  

$245,000

$230,000

  *Effective for limitation years ending in calendar year

**Effective for plan years beginning in the calendar year