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Keeping Our Clients Informed

The IRS places annual limits on the amount of contributions made to retirement plans. IRC Section 415 requires the limits to be adjusted annually for cost of living increases. On November 1, 2023 the IRS announced cost of living adjustments affecting dollar limitations for the tax year 2024.

Type of Limit 2024 2023
401(k) deferral limit $23,000 $22,500
401(k) catch-up $7,500 $7,500
Defined contribution plan maximum limit $69,000 $66,000
Qualified plan compensation limit $345,000 $330,000
Highly compensated employee $155,000 $150,000
OASDI wage base $168,600 $160,200

WARNING: The Department of Labor has intensified their plan audit program. They are keying in on employee deferral deposits. The current ruling is deposits must be made no later than the 5th business day following the day on which the amounts would have been payable to the participant. We cannot stress to you enough that the DOL IS VERY SERIOUS about the timely deposit of these monies. Some plan sponsors have had to go back 5+ years and reimburse the plans for lost earnings on deposits not made timely.

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