On October 21, 2022, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the tax year 2023. Here are the highlights:
Highlights of Changes for 2023
The annual compensation limit under Code Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $305,000 to $330,000.
The limitation for defined contribution (DC) plans under Section 415(c)(1)(A) (annual additions) has been increased for 2023 to $66,000 from $61,000.
The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for lowand
moderate-income workers is $73,000 for married couples filing jointly, up from $68,000; $54,750 for heads of household, up from $51,000; and $36,500 for singles and married individuals filing separately, up from $34,000.