The IRS recently released limits for benefit plan contributions and pension plans.
In Revenue Procedure 2024-40, the following information was included:
- Health flexible spending account max employee salary reduction contribution: $3,300 ($100 increase over 2024 limit)
- Transportation (commuter highway vehicle/transit pass) or parking maximum: $325 ($10 increase over 2024 limit)
- Adoption assistance: $17,280 (increase of $470 over 2024 limit)
Dependent care spending account maximums are set by statute. As a result, the limit is the smallest of the following:
- $5,000 (employee married filing jointly) / $2,500 (employee married but filing separately)
- Employee’s “earned income” for year
- Spouse’s “earned income” if employee is married at end of taxable year
Notice 2024-80 outlined the following cost-of-living adjustments imposed on pension plans and other items for tax year 2025.
- Section 401(k) Plan (or SAR SEP): $23,500 (increase of $500 over 2024 limit)
- Section 403(b) Plan: $23,500 (increase of $500 over 2024 limit)
- Section 408(p)(2)(E) SIMPLE Plan: $16,500 (increase of $500 over 2024 limit)
- Section 457(E)(15): $23,500 (increase of $500 over 2024 limit)
- Section 415 (Defined Contribution Plans): $70,000 (increase of $1,000 over 2024 limit)
- Section 415 (Defined Benefit Plans): $280,000 (increase of $5,000 over 2024 limit)
- Highly Compensated Employees Section 414(q)(1)(B): $160,000 (increase of $5,000 over 2024 limit)
- Limited Governmental Plans (prior to 7/1/93): $520,000 (increase of $15,000 over 2024 limit)
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.
