- within Intellectual Property topic(s)
- with readers working within the Utilities and Construction & Engineering industries
The IRS has released the 2026 cost-of-living adjustments to certain limits, thresholds and penalties that apply to employee benefits plans and programs. The following charts provide the applicable limits for 2026 in comparison to 2025.
Qualified Retirement Plan Changes for 202612
|
Provision |
2026 |
2025 |
Change? |
|
|
401(k)/403(b) Plans |
Annual Limit on Deferrals |
$24,500 |
$23,500 |
Yes |
|
Annual Catch-up Limit, 50 years or older |
$8,000 |
$7,500 |
Yes |
|
|
Annual Catch-up Limit, Age 60-63 |
$11,250 |
$11,250 |
No |
|
|
Annual Limit on Contributions (DC Plans) |
$72,000 |
$70,000 |
Yes |
|
|
General Limits & Thresholds |
HCE Prior Year Compensation Threshold |
$160,000 |
$160,000 |
No |
|
Key Employee Compensation Threshold |
$235,000 |
$230,000 |
Yes |
|
|
HCE Roth Catch-up Threshold |
$150,000 |
$145,000 |
Yes |
|
|
Annual Compensation Limit |
$360,000 |
$350,000 |
Yes |
|
|
ESOP Limits |
Amount Balance Limit Subject to 5-Year Distribution Period |
$1,455,000 |
$1,415,000 |
Yes |
|
Incremental Amount Adding Additional Year(s) to 5-Year Distribution Period |
$290,000 |
$285,000 |
Yes |
|
|
Maximum Withdrawal |
Domestic Abuse Distribution |
$10,500 |
$10,300 |
Yes |
|
Qualified Long-term Care |
$2,600 |
$2,600 |
No |
|
|
Withdrawal for Emergency Expenses |
$1,000 |
$1,000 |
No |
|
|
Defined Benefit Plans |
Annual Benefit Limit |
$290,000 |
$280,000 |
Yes |
PBGC Premiums for Defined Benefit
Pension Plan for 20263
|
Premium |
2026 |
2025 |
Change? |
|
|
Single Employer |
Flat Rate (Per Participant) |
$111 |
$106 |
Yes |
|
Variable Rate for $1,000 of Unfunded Vested Benefits |
$52 |
$52 |
No |
|
|
Per Participant Variable Cap |
$751 |
$717 |
Yes |
|
|
Multiemployer Plans (e.g., union) |
Flat Rate (Per Participant) |
$40 |
$39 |
Yes |
Deferred Compensation Limit Changes
for 2026
|
Provision |
2026 |
2025 |
Change? |
|
|
457(b) Plans4 |
Annual Limit on Contributions |
$24,500 |
$23,500 |
Yes |
|
Annual Catch-up Limit |
$8,000 |
$7,500 |
Yes |
|
|
409A Deferred Compensation |
Specified Employee Compensation Threshold |
$235,000 |
$230,000 |
Yes |
|
Involuntary Separation Pay Limit |
$720,000 |
$700,000 |
Yes |
Health and Welfare Plan Changes for
20265
|
Provision |
2026 |
2025 |
Change? |
|
|
HDHP & HSA Limits |
Annual Deductible – Minimum |
$1,700/$3,400 |
$1,650/$3,300 |
Yes |
|
Out-of-Pocket Expenses (HSA) – Maximum |
$8,500/$17,000 |
$8,300/$16,600 |
Yes |
|
|
HSA Contribution Limit (Individual/Family) |
$4,400/$8,750 |
$4,300/$8,550 |
Yes |
|
|
Catch-Up Limit |
$1,000 |
$1,000 |
No |
|
|
Flexible Spending Account (FSA) |
Health FSA – Employee Contribution Limit |
$3,400 |
$3,300 |
Yes |
|
Health FSA – Maximum Carryover |
$680 |
$660 |
Yes |
|
|
Dependent Care FSA – Employee Contribution Limit |
$7,500 married filing jointly or head of household $3,750 married filing separately |
$5,000 married filing jointly or head of household $2,500 married filing separately |
Yes |
Affordable Care Act (ACA) Changes for
2026
|
Provision |
2026 |
2025 |
Change? |
|
|
ACA Limits for Non-Grandfathered Health Plans6 |
Out-of-Pocket Maximum (Individual/Family) |
$10,600/$21,200 |
$9,200/$18,400 |
Yes |
|
Embedded Individual Maximum within Family Coverage |
$10,150 |
$9,200 |
Yes |
|
|
Affordability |
9.96% |
9.02% |
Yes |
|
|
Penalties 7 |
No Offer of Coverage (Penalty A) |
$3,340 |
$2,900 |
Yes |
|
Coverage Fails Minimum Value or Affordability |
$5,010 |
$4,350 |
Yes |
|
|
Incorrect, Late, or Failure to File ACA Reporting Forms |
$340 |
$330 |
Yes |
|
|
Incorrect or Failure to Furnish ACA Reporting Forms |
$340 |
$330 |
Yes |
|
|
Failure Resulting From Intentional Disregard |
$680 |
$660 |
Yes |
|
|
Filing of a Corrected Form within 30 Days After Due Date Filing a Corrected Form Between 30 Days After Due Date and August 1 |
$60 per Form $130 |
$60 per Form $130 |
No No |
Social Security Changes for
20268
|
2026 |
2025 |
Change? |
|
|
Wage Base |
$184,500 |
$176,100 |
Yes |
Footnotes
1 https://www.irs.gov/pub/irs-drop/n-25-67.pdf.
2 Additional changes apply to SEPs and SIMPLEs that are not addressed in this alert.
3 https://www.pbgc.gov/employers-practitioners/premium-filings/rates.
4 https://www.irs.gov/pub/irs-drop/n-25-67.pdf.
5 https://www.irs.gov/pub/irs-drop/rp-25-19.pdf.
6 https://www.irs.gov/pub/irs-drop/rp-25-25.pdf,https://www.irs.gov/pub/irs-drop/rp-25-26.pdf.
7 https://www.irs.gov/pub/irs-drop/rp-24-40.pdf.
8 https://www.ssa.gov/oact/cola/cbb.html
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
