Annual Limits on Qualified Plans for 2022
On November 4, 2021, the Internal Revenue Service (IRS) released Notice 2021-61, which sets forth the 2022 cost-of-living adjustments affecting dollar limits on benefits and contributions for qualified retirement plans. The health savings account (HSA) and high deductible health plan (HDHP) annual deductible and out-of-pocket expense adjustments were announced earlier this year in Revenue Procedure 2021-25. In addition, the Social Security Administration announced its cost-of-living adjustments for 2022 on October 13, 2021, which include a change to the taxable wage base.
The IRS previously issued guidance on temporary COVID-19 relief for cafeteria plans provided in the Consolidated Appropriations Act. Among other things, these temporary rules allow employers to amend their cafeteria plans to permit all unused balances in health or dependent care flexible spending accounts (FSAs) at the end of the 2021 plan year to be used for expenses in 2022. For more information about these temporary rules, see Stinson's previous blog: IRS Guidance on Coronavirus Relief for FSAs, DCAPs, and Cafeteria Plans: Almost Anything Goes.
The following chart summarizes the 2022 limits for benefit plans. The 2021 limits are provided for reference.
