On November 1, 2023, the IRS announced the inflation adjusted benefit plan limitations effective in 2024 in Notice 2023-75. The good news is the amount that can be electively deferred into a 401(k) or 403(b) plan increases from the current $22,500 to $23,000. However, the age 50 catch-up contribution remains the same as in 2023 at $7,500. The annual limit for contributions to a 457(b) plan also increases to $23,000. However, keep in mind while deferrals to a 401(k) or 403(b) plan share the one limit under Internal Revenue Code (Code) section 402(g), 457(b) plans have a separate independent limit.
Other important increases included the total compensation that can be considered under a qualified plan increasing from $330,000 to $345,000. The amount of compensation to be considered a Highly Compensated Employee under Code section 414(q) goes up to $155,000 from $150,000. The Code section 415 limit on the annual benefit from a defined benefit plan increased from $265,000 to $275,000. And the maximum annual contribution to a defined contribution plan under Code section 415 increased from $66,000 to $69,000.
