The Internal Revenue Service (IRS) has announced 2026 dollar limits on benefits, contributions, and recognizable compensation. The Internal Revenue Code (Code) affords tax benefits for employers that sponsor qualified plans and for employees who participate in such plans. In exchange for these tax benefits, the Code places limits on the contribution and benefit amounts. The IRS makes annual cost-of-living adjustments to these limits.
The key limits for 2026 (and the limits that applied in 2025) are listed in the table below:
Code Section |
Limit |
2026 |
2025 |
|
§402(g)(1)(B) |
401(k)/403(b) Elective Deferrals |
$24,500 |
$23,500 |
|
§457(e)(15)(A) |
457(b) Contributions |
$24,500 |
$23,500 |
|
§414(v)(2)(B)(i) |
Age 50+ "Catch-Up" Contributions to 401(k), 403(b), and governmental 457(b) plans |
$8,000 |
$7,500 |
|
§414(v)(2)(B)(ii) |
Age 60-63 "Catch-Up" Contributions to 401(k), 403(b), and governmental 457(b) plans |
$11,250 |
$11,250 |
|
§414(v)(7)(A) |
Mandatory Roth Catch-Up Wage Threshold |
To Be Issued Next Year |
$150,000* |
|
§415(c)(1)(A) |
DC Annual Additions |
$72,000 |
$70,000 |
|
§415(b)(1)(A) |
DB Annual Benefits |
$290,000 |
$280,000 |
|
§414(q)(1)(B)(i) |
Highly Compensated Employees |
$160,000 |
$160,000 |
|
§401(a)(17)(A) |
Annual Compensation Taken into Account |
$360,000 |
$350,000 |
|
§416(i)(1)(A)(i) |
Key Employee/Officer |
$235,000 |
$230,000 |
|
§223(b)(2) |
HSA Annual Contribution Individual Family Age 55+ “Catch-Up” Contributions |
$4,400 $8,750 $1,000 |
$4,300 $8,550 $1,000 |
|
§125(i) |
Health Flexible Spending Account Annual Contribution Maximum Rollover |
$3,400 $680 |
$660 |
|
§9831(c) |
Excepted Benefit HRA |
$2,200 |
$2,150 |
|
§9831(d) |
Qualified Small Employer HRA Individual Family |
$6,450 $13,100 |
$6,350 $12,800 |
|
Social Security Wage Base |
|
$184,500 |
$176,100 |
* 2025 wage threshold is used for 2026 determinations.
The most important changes in these limits are as follows:
- The annual limit on elective deferrals will rise from $23,500 to $24,500. "Catch-up contributions" for those age 50 and older are limited to $8,000 in 2026 for a total annual limit of $32,500. And for those age 60-63, a higher catch-up contribution cap of $11,250 is available, for an annual cap of $35,750.
- Beginning January 1, 2026, catch-up contributions for employees with 2025 FICA wages that exceed $150,000 must be made on a Roth basis.
- The total annual limit on employer and employee contributions ("annual additions") will rise from $70,000 to $72,000. ("Catch-up contributions" do not apply in calculating this limit.) This will benefit employees in defined contribution plans that provide for after-tax employee contributions or that include generous employer-provided benefits.
- The annual limit on compensation that can be used in calculating contributions and benefits and in performing certain nondiscrimination testing will increase from $350,000 to $360,000 (and will be even higher for certain governmental plans).
- The annual amount that individuals can contribute to health savings accounts, if they are covered by high-deductible health plans, will increase from $4,300 to $4,400 in the case of individual coverage, and from $8,550 to $8,750 in the case of family coverage.
- And the Social Security Administration independently announced that the maximum amount of wages subject to Social Security taxes for 2026 will increase from $176,100 to $184,500.
Note: Effective January 1, 2026, the One Big Beautiful Bill increased the annual contribution limit to a dependent care flexible spending account from $5,000 to $7,500 ($2,500 to $3,750 for an individual with a tax filing status of married filing separately). The dependent care flexible spending account limit is not subject to an annual cost-of-living adjustment.
Please contact any of the attorneys in our Employee Benefits and Executive Compensation Group if you have any questions regarding this alert.