All Articles

IRS Announces Cost of Living Adjustments for 2021

IRC Section 415 requires that plan limits be adjusted annually for cost-of-living increases. These adjustments are calculated and released by the Internal Revenue Service (IRS) each year. Released on October 26, the IRS provided tax inflation adjustments for 2021 in Notice 2020-79

There is little change in many of the 2021 plan limits but be sure to view a detailed listing below:

PLAN LIMITS202120202019
401(k)/403(b) Deferrals$19,500$19,500$19,000
401(k)/403(b) Catch Up            $6,500$6,500$6,000
SIMPLE Deferrals                     $13,500$13,500$13,000
SIMPLE Plan Catch Up$3,000$3,000$3,000
457 Deferrals              $19,500$19,500$19,000
IRA Catch Up                      $1,000$1,000$1,000
Defined Contribution               $58,000*$57,000$56,000
Defined Benefit        $230,000$230,000$225,000
Includible Compensation$290,000*$285,000$280,000
Tax Credit ESOP Maximum Balance                $1,165,000*         $1,150,000        $1,130,000     
Social Security Taxable Wage Base                      $142,800*$137,700$132,900
SEP Min. Participation Threshold    $650*$600$600
SEP Maximum Participation Threshold$290,000*$285,000$280,000
Key Employee          $185,000$185,000$180,000
Highly Compensated Employee$130,000$130,000$125,000
Maximum Monthly Social Security $3,148*$3,011$2,861
HSA Individual Contribution$3,600*$3,550$3,500
HSA Family Contribution                  $7,200*$7,100$7,000
HSA Catch Up Contribution (ages 55+)$1,000$1,000$1,000
HDHP Minimum Individual Deductible$1,400$1,400$1,350   
HDHP Minimum Family Deductible$2,800$2,800$2,700
HDHP Out-of-Pocket Maximum - Self$7,000*$6,900$6,750
HDHP Out-of-Pocket Maximum - Family$14,000*$13,800$13,500
Monthly Transit/Van Pooling$270$270$265
Monthly Qualified Parking      $270$270$265
FSA Medical Maximum Deferral         $2,750$2,750$2,700
FSA Dependent Care Max. Deferral   $5,000     $5,000$5,000

* Indicates a change from 2020 to 2021.

Download the complete list of 2021 limitations for benefit plans (PDF).

This website uses cookies. By accepting the use of cookies, this message will close and you will receive the optimal website experience. For more information on our cookie policy, please visit our Privacy Policy.