IR-2023-203, Nov. 1, 2023
WASHINGTON — The Inside Income Service introduced at present that the quantity people can contribute to their 401(okay) plans in 2024 has elevated to $23,000, up from $22,500 for 2023.
The IRS at present additionally issued technical steering concerning the entire value‑of‑residing changes affecting greenback limitations for pension plans and different retirement-related gadgets for tax 12 months 2024 in Notice 2023-75PDF.
Highlights of modifications for 2024
The contribution restrict for workers who take part in 401(okay), 403(b), and most 457 plans, in addition to the federal authorities’s Thrift Financial savings Plan is elevated to $23,000, up from $22,500.
The restrict on annual contributions to an IRA elevated to $7,000, up from $6,500. The IRA catch‑up contribution restrict for people aged 50 and over was amended beneath the SECURE 2.0 Act of 2022 (SECURE 2.0) to incorporate an annual value‑of‑residing adjustment however stays $1,000 for 2024.
The catch-up contribution restrict for workers aged 50 and over who take part in 401(okay), 403(b), and most 457 plans, in addition to the federal authorities’s Thrift Financial savings Plan stays $7,500 for 2024. Subsequently, individuals in 401(okay), 403(b), and most 457 plans, in addition to the federal authorities’s Thrift Financial savings Plan who’re 50 and older can contribute as much as $30,500, beginning in 2024. The catch-up contribution restrict for workers 50 and over who take part in SIMPLE plans stays $3,500 for 2024.
The earnings ranges for figuring out eligibility to make deductible contributions to conventional Particular person Retirement Preparations (IRAs), to contribute to Roth IRAs, and to say the Saver’s Credit score all elevated for 2024.
Taxpayers can deduct contributions to a standard IRA in the event that they meet sure circumstances. If in the course of the 12 months both the taxpayer or the taxpayer’s partner was coated by a retirement plan at work, the deduction could also be lowered, or phased out, till it’s eradicated, relying on submitting standing and earnings. (If neither the taxpayer nor the partner is roofed by a retirement plan at work, the phase-outs of the deduction don’t apply.) Listed here are the part‑out ranges for 2024:
- For single taxpayers coated by a office retirement plan, the phase-out vary is elevated to between $77,000 and $87,000, up from between $73,000 and $83,000.
- For married {couples} submitting collectively, if the partner making the IRA contribution is roofed by a office retirement plan, the phase-out vary is elevated to between $123,000 and $143,000, up from between $116,000 and $136,000.
- For an IRA contributor who isn’t coated by a office retirement plan and is married to somebody who is roofed, the phase-out vary is elevated to between $230,000 and $240,000, up from between $218,000 and $228,000.
- For a married particular person submitting a separate return who is roofed by a office retirement plan, the phase-out vary isn’t topic to an annual cost-of-living adjustment and stays between $0 and $10,000.
The earnings phase-out vary for taxpayers making contributions to a Roth IRA is elevated to between $146,000 and $161,000 for singles and heads of family, up from between $138,000 and $153,000. For married {couples} submitting collectively, the earnings phase-out vary is elevated to between $230,000 and $240,000, up from between $218,000 and $228,000. The phase-out vary for a married particular person submitting a separate return who makes contributions to a Roth IRA isn’t topic to an annual cost-of-living adjustment and stays between $0 and $10,000.
The earnings restrict for the Saver’s Credit score (often known as the Retirement Financial savings Contributions Credit score) for low- and moderate-income employees is $76,500 for married {couples} submitting collectively, up from $73,000; $57,375 for heads of family, up from $54,750; and $38,250 for singles and married people submitting individually, up from $36,500.
The quantity people can contribute to their SIMPLE retirement accounts is elevated to $16,000, up from $15,500.
Extra modifications made beneath SECURE 2.0 are as follows:
- The limitation on premiums paid with respect to a qualifying longevity annuity contract to $200,000. For 2024, this limitation stays $200,000.
- Added an adjustment to the deductible restrict on charitable distributions. For 2024, this limitation is elevated to $105,000, up from $100,000.
- Added a deductible restrict for a one-time election to deal with a distribution from a person retirement account made straight by the trustee to a split-interest entity. For 2024, this limitation is elevated to $53,000, up from $50,000.
Particulars on these and different retirement-related cost-of-living changes for 2024 are in Notice 2023-75PDF, out there on IRS.gov.
