By Maggie Hayes and Cris Jones

The IRS has issued its annual employee benefit plan limitations for 2021. Key changes, also highlighted in the chart below, include the following:

  • Code Section 415(c) maximum annual additions increased from $57,000 to $58,000.
  • Compensation limit under Code Section 401(a)(17) increased from $285,00 to $290,000.
  • HDHP Out of Pocket Maximum increased from $6,900 to $7,000 for self-only coverage and from $13,800 to $14,000 for family coverage.
  • HSA Maximum Contribution Limit increased from $3,550 to $3,600 for self-only coverage and from $7,100 to $7,200 for family coverage.
  • All adoption assistance limits and thresholds have increased.
  • All QSEHRA and Archer MSA limits increased.

 

2021

2020 2019

401(k) Plan Limits

Elective Deferrals
Maximum Elective Deferrals for 401(k) Plans

$19,500

$19,500

$19,000

Maximum Elective Deferrals for SIMPLE 401(k) Plans

$13,500

$13,500

$13,000

Maximum Catch-Up Contribution Limits for 401(k) Plans

$6,500

$6,500

$6,000

Maximum Catch-Up Contribution Limits for SIMPLE 401(k) Plans

$3,000

$3,000

$3,000

Annual Additions
Code Section 415(c) Limit

$58,000

$57,000

$56,000

Compensation
Code Section 401(a)(17) Limit

$290,000

$285,000

$280,000

Cafeteria Plan Limits

Health Flexible Spending Accounts
Maximum Salary Reduction

$2,750

$2,750

$2,750

Maximum Carryover to Next Plan Year $550 $550 $500
Dependent Care Assistance Plan
Maximum Contribution Amount $5,000 ($2,500 if married filing separately) $5,000 ($2,500 if married filing separately) $5,000 ($2,500 if married filing separately)
Deemed Income of Spouse Incapable of Self-Care or Full-Time Student

$250 a month with 1 qualifying individual

$500 a month with 2 or more qualifying individuals

$250 a month with 1 qualifying individual

$500 a month with 2 or more qualifying individuals

$250 a month with 1 qualifying individual

$500 a month with 2 or more qualifying individuals

Health Savings Account (HSA)
High Deductible Health Plan (HDHP) Minimum Annual Deductible

$1,400 for self-only

$2,800 for family

$1,400 for self-only

$2,800 for family

$1,350 for self-only

$2,700 for family

HDHP Out-of-Pocket Maximum

$7,000 for self-only

$14,000 for family

$6,900 for self-only

$13,800 for family

$6,750 for self-only

$13,500 for family

HSA Maximum Contribution Limit

$3,600 for self-only

$7,200 for family

$3,550 for self-only

$7,100 for family

$3,500 for self-only

$7,000 for family

HSA Catch-Up Contribution Limit

$1,000

$1,000

$1,000

Highly Compensated Employee (HCE) and Key Employee Threshold

*Thresholds are the same across testing and limits for various plans

HCE Threshold $130,000 $130,000 $125,000
Key Employee Threshold

$185,000 for officer group

$150,000 for more than 1% owner

$185,000 for officer group

$150,000 for more than 1% owner

$185,000 for officer group

$150,000 for more than 1% owner

Consumer-Driven Health Care Limits
Excepted Benefit Health Reimbursement Accounts
Maximum Newly Available Benefit $1,800 $1,800 N/A
Qualified Small Employer Health Reimbursement Account (QSEHRA) Limits

$5,300 for single

$10,700 for family

$5,250 for single

$10,600 for family

$5,150 for single

$10,450 for family

Archer Medical Savings Accounts (MSAs)
Contributions Limits – Single

$1,566 min.

$2,340 max.

$1,527.50 min.

$2,307.50 max.

$1,527.50 min.

$2,275 max.

Contribution Limits – Family

$3,600 min.

$5,362.50 max.

$3,562.50 min.

$5,325 max.

$3,487.50 min.

$5,250 max.

Health Plan Deductible – Single

$2,400 min.

$3,600 max.

$2,350 min.

$3,550 max.

$2,350 min.

$3,500 max.

Health Plan Deductible – Family

$4,800 min.

$7,150 max.

$4,750 min.

$7,100 max.

$4,650 min.

$6,850 max.

HDHP Out-of-Pocket Maximum

$4,800 for single

$8,750 for family

$4,750 for single

$8,650 for family

$4,650 for single

$8,550 for family

Fringe Benefits Limits
Adoption Assistance
Maximum Exclusion for Employer-Provided Adoption Assistance $14,400 $14,300 $14,080
Maximum Exempt from Phased Reduction of Exclusion $216,660 $214,520 $211,160
Maximum Allowable for Exclusion and Credit $256,660 $254,520 $251,160
Educational Assistance
Maximum Income Exclusion $5,250 $5,250 $5,250
Transportation Fringe Benefits
Parking $270 a month $270 a month $265 a month
Transit Passes & Vanpooling $270 a month $270 a month $265 a month
FICA Taxable Wage Base
Social Security
Maximum Taxable Earnings $142,800 $137,700 $132,900
Employer Tax Rate 6.2% 6.2% 6.2%
Employee Tax Rate 6.2% 6.2% 6.2%
Medicare
Employer Tax Rate 1.45% 1.45% 1.45%
Employee Tax Rate 1.45% 1.45% 1.45%