Broker Check

2023 IRS Changes

| October 28, 2022

As of October 21st, 2022, the Internal Revenue Service (IRS) released a notice informing the changes for the 2023 contribution limits. Some numbers to highlight are listed below:

Personal Finance:

Numerous positive changes are coming in 2023! The increase in retirement plan deferral and catchup limits will help savers to inch closer to a secure retirement. In 2023, a saver age 50+ can defer up to $30,000 for retirement! When coupled with higher HSA savings limits, a married couple age 50+ with an HSA-qualifying health plan will have access to an additional Pre-Tax savings opportunity of $6,450. In addition to the increases in the income levels for marginal tax brackets, proper planning could lead to meaningful tax savings.

Another item to note is the change to the gift tax exclusion, which is increasing from $16,000 per individual to $17,000. That means every person is now able to give up to $17,000 in gifts— including cash, property, and material goods— to someone else without having to file a gift tax form.  

For 2022, also important to note that for those living in New Jersey, NJ now allows taxpayers to deduct 529 plan contributions of up to $10,000 per year from state taxable income. The benefit would only be available to households with an annual income of $200,000 or less. To qualify, families must contribute to the NJ Better Education Savings Trust (NJBEST) 529 plan. 

2023 Marginal Tax Brackets:

Tax bracket

































Employee Benefits:

Employers who contribute to a subscribing employee’s Health Savings Account (HSA) should be mindful of the increased “Minimum Deductible” for “Post-deductible HRA” plans partnered with an “HSA qualifying Consumer Directed Health Plan (HSA-CDHP).” The increase in the 2023 HSA limit and the HSA-CDHP Minimum Deductible may foil plans to control and limit subscribing employees' Maximum Out-of-pocket (MOOP) limits in health plans. These plans should be examined, and contributions and/or funding adjusted to ensure they coordinate with MOOP goals.                                  

2023 Benefit Contribution Limits:


2023 Contribution Limits


2022 Contribution Limits


Health and Limited Purpose Flexible Spending Accounts







Health and Limited Purpose FSA Carryover






Dependent Care FSA


Self/Married - $5,000

Married, but filing separately - $2,500


Self/Married - $5,000

Married, but filing separately - $2,500


Commuter Benefits






Parking Benefits




Single - $3,850

Couple, Single Parent Family (SPF) and Family - $7,750


Single - $3,650

Couple, Single Parent Family (SPF) and Family - $7,300



HSA Minimum Deductible as it relates to Post-deductible Health Reimbursement Arrangements (HRA’s)

Single - $1,500

Couple, SPF and Family - $3,000

Single - $1,400

Couple, SPF and Family - $2,800

Adoption Assistance








Single - $5,850

Family - $11,800


Single - $5,450

Family - $11,050



Retirement Plans:

The adjusted limits for Retirement Plans (401(k)/403(b)/457(b)) have a few different impacts to consider for employers. An employer offering a matching or a percentage of compensation contribution, in this case, would now match an additional $25,000 of wages for high-income earners (see Annual Compensation Limit for Qualified Plans). For example, for employers with a 4% match, this moves your maximum matching funding per individual from $12,200 (2022) to $13,200 (2023), a $1,000 increase.  In addition, for plans subject to ADP testing, the ADP calculation for highly compensated employees is likely to rise with the additional $2,000 of additional funding capacity for employee deferrals which has increased to $22,500 for 2023, nearly a 10% increase. Lastly, for those aggressively funding their retirement plans, the annual additions limit is rising by $5,000 to $66,000 (plus $7,500 for anyone age 50+). All these higher limits are great for savers, and for those who utilize the benefit, it should help them get closer to a secure retirement.

2023 Retirement Plan Limits

Elective Deferral Limit for 401(k), 403(b) and 457(b) Plans



Catch-Up Contribution Limit for Age 50+



Annual Compensation Limit for Qualified Plans



Defined Contribution Plan Limit on Annual Additions



Highly Compensated Employee Limit



Defined Benefit Plan Maximum Annual Benefit



Key Employee Limit for Top-Heavy Purposes



IRA Contributions



IRA Catch-up Contribution Limit for Age 50+



Social Security Taxable Wage Base