2021 Benefit Plan Limits

 

401(k) Plan Limits
 

Defined Contribution Plans 2021 2020 Change

Maximum employee elective deferral

$19,500

$19,500

no change

Employee catch-up contribution (if age 50 or older by year-end) 1

$6,500

$6,500

no change

Defined contribution maximum limit, all sources (employee + employer) 2

$58,000

$57,000

+$1,000

Defined contribution maximum limit (if age 50 or older by year end); maximum contribution all sources plus catch-up

$64,500

$63,500

+$1,000

Employee compensation limit for calculating contributions

$290,000

$285,000

+$5,000

Key employees' compensation threshold for nondiscrimination testing 3

$185,000

$185,000

no change

 

Highly compensated employees' threshold for nondiscrimination testing 4

$130,000

$130,000

no change

1 The $6,500 catch-up contribution limit for participants age 50 or older applies from the start of the year for those turning 50 at any time during the year.

2 Total contributions from all sources may not exceed 100% of a participant's compensation.

3 Includes officers of the company sponsoring the plan.

4 For the 2021 plan year, as in 2020, an employee who earns more than $130,000 is an HCE.

Source: IRS Notice 2020-79.

 

 

HSA and HDHP Limits

Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs)  2021 2020 Change

HSA contribution limit
(employer + employee)

Self-only: $3,600
Family: $7,200

Self-only: $3,550
Family: $7,100

Self-only: +$50
Family: +$100

HSA catch-up contributions
(age 55 or older)

$1,000

$1,000

no change

HDHP minimum deductibles

Self-only: $1,400
Family: $2,800

Self-only: 1,400
Family: $2,800

no change
no change

HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)

Self-only: $7,000
Family: $14,000

Self-only: $6,900
Family: $13,800

Self-only: +100
Family: +$200

Source: IRS Notice 2020-32.

 

 

 

Health FSA Limits
 

Health Care Flexible Spending Accounts (Health FSAs) and Limited-Scope (Vision/Dental) FSAs

2021

2020

Change

Maximum salary deferral contribution

$2,750

$2,750

no change

Source: IRS Notice 2019-44.

 

 

 

QSEHRA Limits

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)  2021 2020 Change

Maximum payments and reimbursements through the QSEHRA

Self-only: $5,300
Family: $10,700

Self-only: $5,250
Family: $10,600

Self-only: +$50
Family: +$100

Source: IRS Notice 2019-44.

 

Commuter Transit and Parking Limits
 

Qualified Transportation Benefit Tax Exclusion (monthly limits)

2021

2020

Change

Transit passes and van pool services (employer + employee)

$270

$270

no change

 

Qualified parking

$270

$270

no change

Source: IRS Notice 2019-44.

 

 

 

Earnings Subject to Social Security Payroll Tax

Social Security (FICA) Payroll Tax

2021

2020

Change

Maximum earnings subject to Social Security 12.4% FICA payroll tax (6.2% paid by employer and 6.2% paid by employee)

$142,800

$137,700

+$5,100

Source: Social Security Administration.