Basic Annual Limit
$23,000 for 2024 (up from $22,500 for 2023)
The calendar year limits for elective deferrals are defined as 100% of compensation up to the $23,000 for 2024. This limit applies to all employees.
Service Based “Catch-up” Limit – 402(g) – Applicable to 403(b) Only
Employees with fifteen or more years of service with the school district may be eligible for a special higher annual limit ($3,000 additional per year). To qualify, a participant’s prior average annual contributions must not exceed $5,000 per year. This extra annual amount of $3,000 per year is capped at a cumulative limit of $15,500. The participant’s age is not a factor for determining eligibility for this higher limit. Employees who qualify for this catch-up must take this amount prior to taking advantage of the Age-Based Catch-up. The special Catch-Up provision is calculated and used prior to using the Age-Based additional amount.
Excess contributions occur when the total contributions are greater than the maximum contribution limit (MAC), resulting in additional taxes and/or penalties.
Age Based Additional Amount
In 2024, employees who are age 50 or older by December 31, 2024, may contribute an additional $7,500 above the basic annual limit of $23,000 for a total of $30,500.
The participant’s years of service with the employer is not a factor in determining eligibility for this higher limit.
Employees who contribute to both a 403(b) and 401(k) account are limited to one age-based additional amount per year between the accounts. 457(b) accounts also have an Age-Based additional amount that does not offset the 403(b) and/or 401(k) amount.
Special 457(b) catch-up contributions
Special 457(b) catch-up contributions, if permitted by the plan, allow a participant for 3 years prior to the normal retirement age (as specified in the plan) to contribute the lesser of:
Twice the annual limit of $46,000 in 2024 ($45,000 in 2023), or
The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions)
Contribution Accounting Formula
Step 1: The Basic Annual Amount is reduced by the following:
Contributions made to all plans of the employer including 401(k) but excluding 457(b).
403(b) contributions made to other employer plans, Contributions to SEP or 401(k) in which the employee would have a 50% interest.
Step 2: Employees eligible for the Service Based catch-up must apply this amount prior to utilizing the Age Based catch-up.
Step 3: The eligible age based limitation is applied to the final basic annual limitation.
These rules are explained further in IRS Publication 571.
Click here to view Publication 571 on the IRS website.
Summary of Maximum Contribution Limits for 2023 and 2024*
| 2023 | 2024 | |
|---|---|---|
| 403b Elective Deferrals | $22,500.00 | $23,000.00 |
| 457 Deferral Limit (Combined Employee and Employer contributions) | $22,500.00 | $23,000.00 |
| 403b Annual Combined Limit (Employee and Employer contributions) | $66,000.00 | $69,000.00 |
| Age Based Catch-Up Contributions for 50+ (403(b) and 457(b) Plans) | $7,500.00 | $7,500.00 |
| Service Based Catch-Up Contributions (403(b) Plan Only) | $3,000.00 | $3,000.00 |
| 457 Annual Special Catch-up limit (3 years prior to the normal retirement age) | $45,000.00 | $46,000.00 |
*as published by the Internal Revenue Service
