Headliners: 401(k) deferral rises to $23,500, IRA limit stays $7,000, new “age 60–63” catch-ups, refreshed plan thresholds, and SECURE 2.0 guidance on disaster withdrawals/loans and W-2 reporting.
Key 2025 contribution limits (most common items)
| Item | 2025 limit | Notes |
|---|---|---|
| 401(k)/403(b)/Govt. 457(b) elective deferrals | $23,500 | Also applies to Thrift Savings Plan. |
| Age 50+ catch-up (401(k)/403(b)/457(b)) | $7,500 | Unchanged. |
| Special catch-up at ages 60–63 (401(k)/403(b)/457(b)) | $11,250 | SECURE 2.0 add-on; separate from the age-50 catch-up rules. |
| Defined contribution annual additions (415(c)) | $70,000 | Employer + employee combined limit. |
| IRA contribution | $7,000 | Catch-up (50+): $1,000 (unchanged). |
| SIMPLE IRA / SIMPLE 401(k) deferrals | $16,500 | Some SIMPLE arrangements retain a special higher cap of $17,600. |
| SIMPLE age 50+ catch-up | $3,500 | Unchanged. |
| SIMPLE ages 60–63 special catch-up | $5,250 | SECURE 2.0 add-on for 2025. |
| Starter 401(k)/403(b) deferral-only limit | $6,000 (+$1,000 catch-up) | For plans using the “starter” design. |
Heads-up for catch-ups: If your prior-year wages were at/above a specified threshold, some employer-plan catch-ups must be designated Roth. Confirm with your plan/payroll.
Other notable 2025 plan thresholds
Plan limits & compensation caps
- Defined benefit annual benefit cap (415(b)): $280,000
- Compensation cap (401(a)(17)): $350,000 (some gov’t plans: $520,000)
- Highly Compensated Employee (HCE) threshold: $160,000
- Top-heavy “key employee” threshold: $230,000
- QLAC premium limit: $210,000
IRAs & Saver’s Credit
- Traditional IRA deduction phase-outs (active participant): Single/HOH $79k–$89k; MFJ (contributing spouse active) $126k–$146k; MFJ (non-active spouse; other spouse active) $236k–$246k; MFS $0–$10k.
- Roth IRA phase-outs: MFJ $236k–$246k; Single/HOH $150k–$165k; MFS $0–$10k.
- Saver’s Credit AGI bands (MFJ): $47,500 / $51,000 / $79,000 (lower tiers for HOH and others).
- QCD (IRA charitable transfers) annual cap: $108,000; one-time split-interest QCD: $54,000.
Some SIMPLE and special-case limits have additional sub-rules; check your plan document or administrator.
SECURE 2.0: Disaster relief for retirement plans & IRAs (FAQs)
Qualified disaster recovery distributions
- Up to $22,000 (aggregate across plans/IRAs) per disaster.
- No 10% early withdrawal penalty.
- Taxable over 3 years (or all in year of receipt by election).
- May repay within 3 years to an eligible plan/IRA; treat like a rollover.
Home purchase/construction distributions
If a first-time homebuyer IRA distribution or hardship withdrawal for a principal residence wasn’t used because of the disaster, you can generally repay it within a specified window.
Plan loans
- Employers may allow a 1-year repayment suspension for due payments during/after the incident period.
- Temporary higher loan limit: up to the vested account balance, capped at $100,000 (minus other loans).
Employers adopt these features at their option, but eligible individuals can still self-treat a distribution as “qualified” on their tax return if criteria are met (use Form 8915-F and keep FEMA disaster details).
SECURE 2.0: W-2 & 1099-R reporting reminders
De minimis incentives
Small cash-equivalent incentives that encourage joining a 401(k) or 403(b) are generally taxable wages (subject to regular withholding).
Roth SIMPLE & Roth SEP
- Employee salary reductions → on W-2 boxes 1/3/5; box 12 code F (SEP) or S (SIMPLE).
- Employer match/nonelective to Roth SIMPLE/SEP → reported on Form 1099-R for the year allocated.
Designated Roth match/nonelective (qualified plans)
- These employer Roth contributions are not wage-taxed and are reported on 1099-R (code G) for the year allocated.
- Regular designated Roth deferrals still appear on the W-2 with box 12 code AA (401(k)), BB (403(b)), or EE (gov’t 457(b)).
Filed 2023 W-2s without these updates? You may need to issue a W-2c. See the latest W-2/1099-R instructions.
Action checklist for taxpayers & employers
- Employees: Raise your 2025 deferral to hit the new $23,500 cap; confirm if your catch-up must be Roth based on prior-year wages.
- SIMPLE participants: Re-evaluate savings vs. the new $16,500 cap and the age 60–63 catch-up.
- Plan sponsors: Review SECURE 2.0 disaster and Roth-employer-contribution features, and ensure payroll/W-2 mapping matches IRS guidance.
- Impacted by disasters: Track FEMA declaration numbers and incident dates; keep documentation for Form 8915-F and any repayments.
