The Internal Revenue Code imposes contribution limits on qualified plans, including 401ks. The Code also provides a mechanism to adjust for cost of living increases. For 2023, the contribution limit for 401k plans is $22,500 up from $20,500 for 2022.
The IRS announced its cost of living adjustments applicable to dollar limitations on benefits and contributions for retirement plans effective for Tax Year 2023. The limitation on annual salary deferrals into a 401k or 403b plan will increase from $20,500 to $22,500.