2021 EMPLOYEE BENEFIT PLAN LIMITS

The Internal Revenue Service (IRS) recently announced the cost-of-living adjustments to the contribution and benefit limits for various employer-sponsored plans for 2021. Nearly all the dollar limits currently in effect for 2020 will remain the same, with only a few amounts experiencing minor increases for 2021.

The table below compares the dollar limits for certain employee benefit programs for 2020 and 2021.

RETIREMENT PLAN LIMITS20202021
401(k), 403(b) & 457(b) contributions$19,500$19,500
Catch-up contributions (age 50+)$6,500$6,500
Defined contribution plan (annual contributions)$57,000$58,000
    
HEALTH AND WELFARE PLAN LIMITS   
Health FSA salary reduction$2,750$2,750
Health FSA carryover$500$550
    
Dependent Care FSA – married filing jointly or single parent$5,000$5,000
Dependent Care FSA – married filing separately$2,500$2,500
    
Excepted Benefit HRA$1,800$1,800
Qualified Small Employer HRA (QSEHRA) – self only $5,250$5,300
Qualified Small Employer HRA (QSEHRA) – family$10,600$10,700
    
HDHP: max. annual out-of-pocket (self only)$6,900$7,000
HDHP: max. annual out-of-pocket (family)$13,800$14,000
HDHP: min. annual deductible (self only)$1,400$1,400
HDHP: min. annual deductible (family)$2,800$2,800
    
HSA: annual contributions (self only)$3,550$3,600
HSA: annual contributions (family)$7,100$7,200
HSA: catch-up contributions (age 55+)$1,000$1,000
    
Qualified Transit and Parking – monthly$270$270

Details on these and other cost-of-living adjustments can be found in IRS Revenue Procedure 2020-45 and IRS Notice 2020-79.

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