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November 12, 2021

Elective Deferral Contribution

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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

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

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. For instance, if an individual participates in a 403(b) plan, a 401(k) plan and a SIMPLE IRA, the maximum salary deferral that the individual can contribute for 2009 is $16,500, plus an additional $5,500 if the individual is at least age 50 by year-end. This does not include salary reduction contributions to 457(b) plans, as those contributions are not salary deferral contributions. Therefore, an individual who participates in a 457(b) plan and a 401(k)/403(b) plan can contribute $16,500 + catch-up  to the 457(b) plan, plus an additional $16,500 + catch-up to the 401(k)/403(b) plan.
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