The following is a list of projected limitation adjustments and tax provision changes that will take effect in 2026. Compensation thresholds are the income limits that define eligibility for a retirement plan. Contribution limits are the maximum amounts of money that an individual can contribute to a retirement account, regardless of compensation. We will update this information as additional changes are released. It is essential to be familiar with changes in payroll taxes each year to process payroll accurately.
2026 Projected Compensation Thresholds
| Contribution Type | Projected 2026 Limit |
|---|
| Limitation on the annual benefit under a defined benefit plan | $290,000 |
| Compensation limit for defined-contribution plans | $72,000 |
| Annual compensation limit for qualified plans | $360,000 |
| Salary threshold used in the definition of a “key employee” in a top-heavy plan | $230,000 |
| Salary threshold used in the general definition of a highly compensated employee (HEC) | $160,000 |
| Applicable dollar amount for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) | $146,000 |
| Applicable dollar amount for all other taxpayers who are active participants (other than married taxpayers filing separate returns) | $89,000 |
| Applicable dollar amount for a taxpayer who is not an active participant but whose spouse is an active participant | $246,000 |
2026 Projected Contribution Limits
| Contribution Type | Projected 2026 Limit |
|---|
| 401(k)/403(b)/457 Plan Employee Contribution | $24,500 |
| 401(k)/403(b)/457 Plan Catch-Up Contribution | $8,000 |
| 401(k)/403(b)/457 Plan Catch-Up Contribution (60-63 Years Old) | $11,500 |
| 401(k)/403(b)/457 Plan Total Contribution (Under 50 Years Old) | $72,000 |
| 401(k)/403(b)/457 Plan Total Contribution (50+ Years Old) | $80,000 |
| 401(k)/403(b)/457 Plan Total Contribution (60-63 Years Old) | $83,500 |
| Traditional IRA Contribution | $7,500 |
| Traditional IRA Catch-Up Contribution | $1,100 |
| Roth IRA Contribution | $7,500 |
| Roth IRA Catch-Up Contribution | $1,100 |
| SEP-IRA Contribution | $72,000 |
| SIMPLE IRA/SIMPLE 401(k) Contribution | $17,000 |
| SIMPLE IRA/SIMPLE 401(k) Catch-Up Contribution | $4,000 |
| SIMPLE IRA/SIMPLE 401(k) Catch-Up Contribution (60-63 Years Old) | $5,000 or $5,250 |
| HSA Contribution (Single) | $4,400 |
| HSA Contribution (Family) | $8,750 |
| HSA, Age 55 Catch-Up | $1,000 |
| Healthcare FSA Contribution | $3,400 |
2026 Projected IRA Thresholds
| Contribution Type | Projected 2026 Limit |
|---|
| Income Limit for IRA, Single and an Active Participant | $81,000 - $91,000 |
| Income Limit for IRA, Married and an Active Participant | $129,000 - $149,000 |
| Income Limit for IRA, Married and Spouse is an Active Participant | $242,000 - $252,000 |
| Income Limit for Roth IRA, Single | $153,000 - $168,000 |
| Income Limit for Roth IRA, Married Filing Jointly | $242,000 - $252,000 |
2026 Projected Retirement Thresholds
| Contribution Type | Projected 2026 Limit |
|---|
| Annual compensation limit for eligible participants in certain governmental plans | $520,000 |
| Compensation amount regarding simple employee pensions (SEPSs) | $750 |
| Limitation concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan | $140,000 |
| Definition of a control employee for fringe-benefit valuation purposes | $140,000 |
| Compensation amount for a control employee for fringe-benefit valuation purposes | $285,000 |
| Dollar limitation on premiums paid for a qualifying longevity annuity contract | $210,000 |
| Saver's Credit Income Limit (Single) | $24,250 (50%); $26,250 (20%); $40,250 (10%) |
| Saver's Credit Income Limit (Married Filing Jointly) | $48,500 (50%); $52,500 (20%; $80,500 (10%) |
2026 Projected Tax Provisions
| Contribution Type | Projected 2026 Limit |
|---|
| Qualified Transportation Fringe Benefit | $340/month |
| Adoption Credit | $17,280 |
| Foreign Earned Income Exclusion | $130,000 |
| Definition of a control employee for fringe-benefit valuation purposes | $140,000 |
| Compensation amount for a control employee for fringe-benefit valuation purposes | $285,000 |
| Dollar limitation on premiums paid for a qualifying longevity annuity contract | $210,000 |
| Saver's Credit Income Limit (Single) | $24,250 (50%); $26,250 (20%); $40,250 (10%) |
| Saver's Credit Income Limit (Married Filing Jointly) | $48,500 (50%); $52,500 (20%; $80,500 (10%) |
2026 Projected Standard Deductions
| Tax Filing Status | 2025 | 2026 (Projected) |
|---|
| Married Filing Jointly and Surviving Spouses | $31,500 | $32,200 |
| Head of Household | $23,625 | $24,150 |
| Single or Married Filing Separately | $15,750 | $16,100 |
Tax Tables: Single
| Tax Rate | Taxable Income |
|---|
| 10% | $11,925 or less |
| 12% | Over $11,925 |
| 22% | Over $48,475 |
| 24% | Over $103,350 |
| 32% | Over $197,300 |
| 35% | Over $250,525 |
| 37% | Over $626,350
|
Tax Tables: Married Filing Jointly and Surviving Spouses
| Tax Rate | Taxable Income |
|---|
| 10% | $23,850 or less |
| 12% | Over $23,850 |
| 22% | Over $96,950 |
| 24% | Over $206,700 |
| 32% | Over $394,600 |
| 35% | Over $501,050 |
| 37% | Over $751,600 |
Tax Tables: Head of Household
| Tax Rate | Taxable Income |
|---|
| 10% | $17,000 or less |
| 12% | Over $17,000 |
| 22% | Over $64,850 |
| 24% | Over $103,350 |
| 32% | Over $197,300 |
| 35% | Over $250,525 |
| 37% | Over $626,350
|
Tax Tables: Married Filing Separately
| Tax Rate | Taxable Income |
|---|
| 10% | $11,925 or less |
| 12% | Over $11,925 |
| 22% | Over $48,475 |
| 24% | Over $103,350 |
| 32% | Over $197,300 |
| 35% | Over $250,525 |
| 37% | Over $375,800
|
FICA Rate and Wage Bases
- The projected Social Security Tax Wage Base for 2026 is $183,600.
- The FICA contribution rate for Social Security and Medicare taxes is 6.2% and 1.45%, respectively, totaling 7.65%.
- There is no wage base for the Medicare (HI) portion of the FICA taxes, and all wages earned are subject to the HI tax; employers and employees are also payees.
- Each pays at a 1.45% rate, although employees pay an additional 0.9% on wages greater than $200,000 for individuals, $250,000 for married couples filing jointly, and $125,000 for married couples filing separately.
- The current cost-of-living adjustment (COLA) for Social Security benefits and SSI payments is 2.5%. Benefits will increase by 2.5% beginning with January 2025 payments.
Estimated 2025 Potential Total FUTA Credit Reductions
- California: 4.6%
- Connecticut: 2.0%
- New York: 2.3%
- Virgin Islands: 4.5%
