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November 12, 2021

Elective Deferral Contribution

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Elective deferral contribution

Also known as salary deferral contributions -made to SIMPLE IRAs, 401(k) plans, SARSEPs, 403(b) plans . A participant may defer up to 100% of his/her salary/wages to the plan, up to the statutory dollar limit in effect for the year.

Definition

Elective deferral contributions, also known as salary deferral contributions made to SIMPLE IRAs, 401(k) plans, SARSEPs, 403(b) plans . A participant may defer up to 100% of his/her salary/wages to the plan, up to the statutory dollar limit in effect for the year. For qualified plans and 403(b) plans, the employer may limit salary reduction contributions to a percentage less than 100% of salary/wages, if permitted. Different limits apply to different types of plans.

The dollar limits from 2014 are as follows:

401(k) and  403(b)
Year Salary deferral/Reduction limit   Catch-up contribution limit
2015 $18,000 $6,000
2016 $18,000 $6,000
2017 $18,000 $6,000
2018 $18,500 $6,000
2019 $19,000 $6,000
2020 $19,500 $6,500
2021 $19,500 $6,500
2022 $20,500 $6,500
2023 $22,500 $7,500
Year SIMPLE IRA and SIMPLE 401(k)
Salary Deferral contribution  limit Catch-up contribution limit
2015 $12,500 $6,000
2016 $12,500 $6,000
2017 $12,500 $6,000
2018 $12,500 $6,000
2019 $13,000 $6,000
2020 $13,500 $6,500
2021 $13,500 $6,500
2022 $14,000 $6,500
2023 $15,500 $7,500
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Referring Cite

IRC §402(g), Treas. Reg. § 1.402(g)-1(b); Prop. Treas. Reg. § 1.402(g)-1(b)(5) and (6)

Additional Helpful Information

  • Salary reduction contributions made to a Section 457 plan are not treated as an elective deferral contribution
  • If an individual participates in multiple employer sponsored plans with salary reduction feature,  the aggregate salary deferral contribution cannot exceed the dollar limit in effect for the year.
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