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Overall limit on deferrals. For 2022, you Limit for deferral under section 501(c)(18) 2. The basic annual limit plus the amount of
shouldn't have deferred more than a total of plans. If you're a participant in a section the basic limit not used in prior years (only
$20,500 of contributions to the plans listed in 501(c)(18) plan (a trust created before June 25, allowed if not using age 50-or-over
(1) through (3), earlier, unless you are 50 or 1959, funded only by employee contributions), catch-up contributions).
older. The specific plan limits for the plans listed you should have deferred no more than the
in (4) through (7), earlier, are discussed later. lesser of $7,000 or 25% of your compensation. Catch-up contributions. You can gener-
Amounts deferred under specific plan limits are Amounts you defer under a section 501(c)(18) ally have additional elective deferrals made to
part of the overall limit on deferrals. plan count toward the overall limit ($20,500 in your governmental section 457 plan if:
Your employer or plan administrator should 2022) and may affect the amount you can defer • You reached age 50 by the end of the
apply the proper annual limit when figuring your under other elective deferral plans. year, and
plan contributions. However, you’re responsible • No other elective deferrals can be made
for monitoring the total you defer to ensure that Limit for deferrals under section 457 plans. for you to the plan for the year because of
limits or restrictions.
the deferrals aren't more than the overall limit. If you're a participant in a section 457 plan (a
deferred compensation plan for employees of If you qualify, your limit can be the lesser of your
Catch-up contributions. You may be allowed state or local governments or tax-exempt or- includible compensation or $20,500, plus
catch-up contributions (additional elective de- ganizations), you should have deferred no more $6,500. However, if you're within 3 years of re-
ferrals) if you're age 50 or older by the end of than the lesser of your includible compensation tirement age and your plan provides the in-
your tax year. For 2022, the catch-up limit for or $20,500 in 2022. However, if you're within 3 creased limit, discussed earlier, that limit may
section 401(k) and 403(b) plans, the TSP, SAR- years of normal retirement age, you may be al- be higher.
SEP plans, and governmental section 457 lowed an increased limit if the plan allows it.
plans is $6,500. For SIMPLE plans, it’s $3,000. See Increased limit, later. Designated Roth contributions. Employers
For more information about catch-up contri- Includible compensation. Generally, this with section 401(k) plans, section 403(b) plans,
butions to: is your Form W-2 wages plus elective deferrals. and governmental section 457 plans can create
• Section 401(k) plans, see Elective Defer- In most cases, it includes all the following pay- qualified Roth contribution programs so that you
rals in chapter 4 of Pub. 560; ments. may elect to have part or all of your elective de-
• SARSEPs, see Salary Reduction Simpli- ferrals to the plan designated as after-tax Roth
fied Employee Pensions in chapter 2 of 1. Wages and salaries. contributions. Designated Roth contributions
Pub. 560; 2. Fees for professional services. are treated as elective deferrals, except that
• SIMPLE plans, see SIMPLE Plans in chap- they're included in income. Your retirement plan
ter 3 of Pub. 560; and 3. The value of any employer-provided quali- must maintain separate accounts and record-
• Section 457 plans, see Limit for deferrals fied transportation fringe benefit (defined keeping for the designated Roth contributions.
under section 457 plans, later. under Transportation, earlier) that isn't in- Qualified distributions from a Roth account
cluded in your income. aren't included in income. A distribution made
Limit for deferrals under SIMPLE plans. If 4. Other amounts received (cash or non- before the end of the 5-tax-year period begin-
you're a participant in a SIMPLE plan, you gen- cash) for personal services you per- ning with the first tax year for which you made a
erally shouldn't have deferred more than formed, including, but not limited to, the designated Roth contribution to the account
$14,000 in 2022. Amounts you defer under a following items. isn't a qualified distribution.
SIMPLE plan count toward the overall limit
($20,500 for 2022) and may affect the amount a. Commissions and tips. Reporting by employer. Your employer gen-
you can defer under other elective deferral b. Fringe benefits. erally shouldn't include elective deferrals in your
plans. wages in box 1 of Form W-2. Instead, your em-
c. Bonuses. ployer should mark the Retirement plan check-
Limit for tax-sheltered annuities. If you're a box in box 13 and show the total amount defer-
participant in a tax-sheltered annuity plan (sec- 5. Employer contributions (elective deferrals) red in box 12.
tion 403(b) plan), the limit on elective deferrals to the following.
for 2022 is generally $20,500. However, if you a. The section 457 plan. Section 501(c)(18)(D) contributions.
have at least 15 years of service with a public Wages shown in box 1 of Form W-2 shouldn't
school system, a hospital, a home health serv- b. Qualified cash or deferred arrange- have been reduced for contributions you made
ice agency, a health and welfare service ments (section 401(k) plans) that to a section 501(c)(18)(D) plan. The amount
agency, a church, or a convention or associa- aren't included in your income. you contributed should be identified with code
tion of churches (or associated organization), c. A SARSEP plan. H in box 12. You may deduct the amount defer-
the limit on elective deferrals is increased by the red subject to the limits that apply. Include your
least of the following amounts. d. A tax-sheltered annuity (section deduction in the total on Schedule 1 (Form
403(b) plan).
1040), line 24f.
1. $3,000. e. A SIMPLE plan.
Designated Roth contributions. These
2. $15,000, reduced by the sum of: f. A section 125 cafeteria plan. contributions are elective deferrals but are in-
a. The additional pre-tax elective defer- cluded in your wages in box 1 of Form W-2.
rals made in earlier years because of Instead of using the amounts listed earlier to Designated Roth contributions to a section
this rule, plus determine your includible compensation, your 401(k) plan are reported using code AA in
b. The aggregate amount of designated employer can use any of the following amounts. box 12, or, for section 403(b) plans, code BB in
box 12. Designated Roth contributions to a gov-
• Your wages as defined for income tax with-
Roth contributions permitted for prior holding purposes. ernmental section 457 plan are reported using
tax years because of this rule. • Your wages as reported in box 1 of Form code EE in box 12.
3. $5,000 times the number of your years of W-2.
service for the organization, minus the to- • Your wages that are subject to social se- Excess deferrals. If your deferrals exceed the
tal elective deferrals made by your em- curity withholding (including elective defer- limit, you must notify your plan by the date re-
ployer on your behalf for earlier years. rals). quired by the plan. If the plan permits, the ex-
cess amount will be distributed to you. If you
If you qualify for the 15-year rule, your elec- Increased limit. During any, or all, of the participate in more than one plan, you can have
tive deferrals under this limit can be as high as last 3 years ending before you reach normal re- the excess paid out of any of the plans that per-
$23,500 for 2022. tirement age under the plan, your plan may pro- mit these distributions. You must notify each
For more information, see Pub. 571. vide that your limit is the lesser of: plan by the date required by that plan of the
1. Twice the annual limit ($41,000 for 2022), amount to be paid from that particular plan. The
or plan must then pay you the amount of the
Page 10 Publication 525 (2022)