Yearly limits for deferred compensation. Deferred compensation: voluntary contributions to a savings plan designed for retirement income; usually exempt from FIT and SIT, depending upon state regulations; includes Internal Revenue Codes 401(k), 403(b), 408(k)(6), 457(b), 501(c) and SIMPLE IRA.
Employee Limits
2020 - 2021
| Deferred Compensation Chart | ||||
| Type | Exempt From **** | Limit <50 Years | Limit >50 Years | W-2 Box Code |
|---|---|---|---|---|
| 401(k) | FIT & SIT | $19,500 | $26,000 | Box 12 - D |
| After-tax Roth 401(k) | Nothing - Fully Taxable | $19,500*** | $26,000*** | Box 12 - AA |
| Simple IRA | FIT & SIT | $13,500 | $16,500 | Box 12 - S |
| 403(b)/ TSA | FIT & SIT | $19,500 | $26,000* | Box 12 - E |
| After-tax Roth 403(b) | Nothing - Fully Taxable | $19,500*** | $26,000* | Box 12 - BB |
| 408(k)(6) / SEP IRA | FIT & SIT | $19,500 | $26,000 | Box 12 - F |
| 457(b) | FIT & SIT | $19,500 | $26,000** | Box 12 - G |
| Roth 457(b) | Nothing - Fully Taxable | $19,000*** | $26,000** | Box 12 - EE |
| 501(c)(18)(D) | FIT & SIT | $7,000 | N/A | Box 12 - H |
* There is a special catch-up election for employees who have completed at least 15 years of service with a qualified organization. Such employees are able to contribute an additional $3,000 annually, which brings the limit to $22,000 (<50) or $28,000.00. (>50). See Retirement Plans FAQs regarding 403(b) Tax-Sheltered Annuity Plans for additional details.
** Special rules may apply depending on the type of entity and how close the employee is to retirement.
*** IRS rules indicate a Roth 401(k) shares the annual limit with a 401(k) plan. A Roth 403(b) shares the annual limit with a 403(b).
See COLA Increases for Dollar Limitation onr Benefits and contributioncontribution.
for more information.
Company Contribution Limits
For company contribution limits, refer to IRS Retirement Topics - Contribution Limits or your plan sponsor.
Over-Contributing
- There are penalties and implications for over-contributing to retirement plans, tax filings, and W-2 corrections
- All corrections must be made by April 15th, otherwise, it is considered taxable income for the current year as well as the previous year and is subject to double taxation.
- The maximum amount that someone can contribute to retirement plans annually is per person and not by the employer.
- If an employee over contributes to their retirement plan, the retirement plan provider will send them a 1099R, which would get filed with their personal tax return.
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For additional information on Employee Limits and Employer (Company) contributions or matches see the IRS resource: