IRS 2026 Cost-of-Living Adjustments | Retirement Health and Welfare Benefit Plans | Foster Swift https://www.michiganitlaw.com/irs-2026-cost-of-living-adjustments-retirement-wealth-plans Wed, 12 Aug 2026 10:59:17 -0400 IRS Announces 2026 Cost-of-Living Adjustments for Retirement Plans and for Health and Welfare Benefit Plans Amanda J. Dernovshek, Julie LaVille Hamlet, Mindi M. Johnson, Olivia K. Reid blogpost-irs-2026-cost-of-living-adjustments-retirement-wealth-plans Fri, 05 Dec 2025 09:00:01 -0500 This blog has been updated since November 7, 2024. The data below is current.

The IRS has announced the 2026 cost-of-living adjustments for retirement plan and health and welfare benefit plan limitations. The charts below set forth the applicable limitations for 2026 relative to the 2025 limitations.

Retirement Plans

The chart below represents some of the important changes the IRS has made to limitation requirements for retirement plans. The changed limitations are between the 2025 limits and the 2026 limits. If you would like to review a complete explanation of all limitation changes made to retirement plans, please see this notice published by the IRS: IRS Notice 2025-67

Retirement Plan Limitation

2025 Limit

2026 Limits

401(k) and 403(b) Employee Contribution Limit

$23,500

$24,500

"Catch-Up Contribution" Limit (age 50 and older)

$7,500

$8,000

Defined Contribution Maximum Contribution

$70,000

$72,000

Annual IRA Contributions

$7,000

$7,500

Defined Benefit Annual Benefit Limit

$280,000

$290,000

Highly Compensated Employee Compensation

$160,000

$160,000

Top-Heavy Key Employee Officer Dollar Limit

$230,000

$235,000

Annual Compensation Limit

$350,000

$360,000

457(b) Plan Contribution Limit

$23,500

$24,500

Social Security Taxable Wage Base

$176,100

$184,500

The IRS has also made changes to the limitation requirements for health and welfare benefit plans for 2026. If you would like to review a complete explanation of all limitation changes made to health and welfare benefit plans, please see these notices published by the IRS: Rev. Proc. 2025-19 and 26 CFR 601.602: Tax forms and instructions.

Health and Welfare Benefit Plans

Health and Welfare Benefit Plan Limitation

2025 Limit

2026 Limit

Health Flexible Spending Account (FSA) Contribution Limit

$3,300

$3,400

HSA Annual Deduction Minimums
-    Family
-    Single


$3,300
$1,650


$3,400
$1,700

HSA Out-of-Pocket Maximums
-    Family
-    Single


$16,600
$8,300


$17,000
$8,500

Qualified Transportation Fringe Benefit Monthly Limits
-    Qualified Parking
-    Transit Pass/Vanpooling


$325
$325


$340
$340

One notable increase is the change to dependent care assistance programs (“DCAP”). The last increase to DCAP was in 1986 when it was raised to $5,000. The $5,000 limit remained until now – the new limit for 2026 is $7,500.

If you have questions related to these limits or how they affect the administration of your plan, please contact one of the authors of this article.

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