2023 Retirement Plan Maximums and Limits/Saver's Credit

The Internal Revenue Service (IRS) has announced the dollar maximums and limits for qualified pension plans for 2023. These reflect the applicable cost-of-living adjustments required by federal tax law and are effective for the 2023 tax year only.

Sections 1–3 highlight contribution maximums and limits established by the IRS for various retirement plans. All dollar amounts are effective January 1, 2023; changes, if any, from 2022 are noted. Section 4 highlights annual compensation amounts for highly compensated employees and key employees in a top-heavy plan. Section 5 highlights the Saver's Credit tax credit for 2023.

See 2022 Contribution Limits

The following table highlights contribution maximums established by the IRS for various retirement plans. All dollar amounts are effective January 1, 2023.

Plan Maximum Elective Deferral or Contribution Limit1 Increase from 2022 Age 50 and Older Additional "Catch-Up" Contribution Limit
TDA, 403(b) Thrift and 401(k)2

$22,500

$2,000

$7,5003

SIMPLE IRA and SIMPLE 401(k)

$15,500

$1,500

$3,500

Traditional IRA and Roth IRA

$6,500

$500

$1,000

Section 457(b) Eligible Deferred Compensation

$22,500

$2,000

$7,5003

Plan Annual Compensation Limit for Contribution Purposes Increase from 2022
TDA, 403(b) Thrift and 401(k), Defined Benefit and Defined Contribution Plans

$330,000 maximum compensation

$25,000

SEP participant requirements

$750 minimum compensation

$100

SEP discrimination requirements

$330,000 maximum compensation

$25,000

Roth IRA

Contribution limit is reduced or eliminated based on the amount by which the taxpayer's Adjusted Gross Income (AGI) minus an "applicable AGI amount" exceeds $15,000 ($10,000 for married taxpayers filing a joint return).

Applicable AGI amounts for 2023:
$218,000 to $228,000 (married filing joint return)
$0 to $10,000 (married filing separate return)
$138,000 to $153,000 (all other taxpayers)

$14,000
unchanged
$9,000

Traditional IRA

Deduction for contribution is reduced or eliminated for an active participant in an employer-sponsored retirement plan, based on the amount by which the taxpayer's AGI minus an "applicable AGI amount" exceeds $10,000 ($20,000 for an active participant who is a married taxpayer filing a joint return).

Applicable AGI amounts for 2023 for active participants:
$116,000 to $136,000 (married filing joint return)
$0 to $10,000 (married filing separate return)
$73,000 to $83,000 (all other taxpayers)

$7,000
unchanged
$5,000

For a married taxpayer filing a joint return who is not an active participant in an employer-sponsored retirement plan, but whose spouse is, the $10,000 amount mentioned above is not increased to $20,000 and the "applicable AGI amount" for 2023 is $218,000 to $228,000 (a $14,000 increase from 2022).

Plan Applicable Maximum Increase from 2022
Defined Benefit

$265,000 on annual benefits*

$20,000

Defined Contribution

$66,000 or 100% of compensation, whichever is less, on annual contributions

$5,000

Plan Applicable Maximum Increase from 2022
Definition of Highly Compensated Employee

$150,000

$15,000

Definition of Key Employee in a Top-Heavy Plan

$215,000

$15,000

The Saver's Credit is a tax credit of up to $1,000 ($2,000 if married filing jointly) for low- and moderate-income taxpayers who contribute to a traditional or Roth IRA, 401(k), 403(b), governmental 457 or SIMPLE IRA plan. The credit is equal to 50%, 20%, 10% or 0% of your contribution, depending on your adjusted gross income. The following table shows the income limits to claim the credit for 2023.

Credit Rate (% of contribution) Married Filing Jointly Head of Household All Other Filers*
50%

Up to $43,000

Up to $32,625

Up to $21,750

20%

$43,001–$47,000

$32,626–$35,625

$21,751–$23,750

10%

$47,001–$73,000

$35,626–$54,750

$23,751–$36,500

0%

$73,001 & up

$54,751 & up

$36,501 & up