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ComplianceTax & AccountingOctober 24, 2022

IRS announces 2023 retirement-plan related cost-of-living adjustments

IRA regular contribution limit will increase to $6,500

On October 21, 2022, the Internal Revenue Service issued Notice 2022-55 announcing retirement plan cost-of-living adjustments (COLAs) applicable to 2023. After several years without an increase to the traditional and Roth individual retirement account (IRA) regular contribution limit, there will be a $500 increase for 2023. Additionally, income thresholds that determine traditional IRA deductibility, Roth IRA eligibility, and saver’s tax credit eligibility will slightly increase. Those limits as well as simplified employee pension (SEP) limits, elective deferral limits, and Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA deferral limits for 2023 are as follows:

IRA Contribution Limits
Tax Year Contribution Limit Catch-Up Contribution Age 50 and Older Contribution Limit
2023 $6,500 $1,000 $7,500
Traditional IRA Deductibility MAGI Thresholds*
Filing Status Tax Year Full Deduction Partial Deduction No Deduction
Single 2023 ≤ $73,000 Between $73,000 and $83,000 ≥ $83,000
Married, Joint 2023 ≤ $116,000 Between $116,000 and $136,000 ≥ $136,000
Married, Joint (not active participant but spouse is) 2023 ≤ $218,000 Between $218,000 and $228,000 ≥ $228,000
Married, Separate 2023 N/A < $10,000 ≥ $10,000
*Applies to individuals that actively participate in an employer sponsored retirement plan.
Roth IRA Eligibility MAGI Thresholds
Filing Status Tax Year Full Deduction Partial Deduction No Contribution
Single 2023 ≤ $138,000 Between $138,000 and $153,000 ≥ $153,000
Married, Joint 2023 ≤ $218,000 Between $218,000 and $228,000 ≥ $228,000
Married, Separate 2023 N/A < $10,000 ≥ $10,000
Saver’s Tax Credit MAGI Thresholds 2023
Filing Status Credit is 50% of Contribution if Income is: Credit is 20% of Contribution if Income is: Credit is 10% of Contribution if Income is: No Credit if Income is:
Married, Joint ≤ $43,500 $43,501 - $47,500 $47,501 - $73,000 > $73,000
Head of Household ≤ $32,625 $32,626 - $35,625 $35,626 - $54,750 > $54,750
All Other Filers ≤ $21,750 $21,751 - $23,750 $23,751 - $36,500 > $36,500
SEP Contribution Limits
Tax Year  
2023 The lesser of 25% of the first $330,000 of compensation or $66,000
Elective Deferral Limits
Tax Year Basic Deferral Limit Catch-Up Deferral Age 50 and Older Total Deferral Limit
2023 $22,500 $7,500 $30,000
SIMPLE Deferral Limits
Tax Year Basic Deferral Limit Catch-Up Deferral Age 50 and Older Total Deferral Limit
2023 $15,500 $3,500 $19,000

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider the Wolters Kluwer IRA Library or on-demand video training offered on a variety of topics. Go here to learn more about training opportunities available to you, or you can call us at 1-800-552-9408.

Mike Schiller
Manager, Specialized Consulting, Tax Advantaged Accounts
With more than 25 years of experience, Mike has worked closely with hundreds of financial organizations to help them create, implement, and maintain their tax-advantaged accounts program.
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