2021 403(b) Contribution Limit
For 2021, the 403(b) Contribution Limit figures are $19,500 (Elective deferral limit) and +$6,500 (Catch-up limit, age 50 and over).
Effective 2021-01-01Source: Notice 2020-79 (IRS)Verified 2026-09-03
Compared with 2020
Every figure on this page is unchanged from 2020.
| Item | 2020 | 2021 | Change |
|---|---|---|---|
| Elective deferral limit | $19,500 | $19,500 | +$0 (+0.0%) |
| Catch-up limit, age 50 and over | +$6,500 | +$6,500 | +$0 (+0.0%) |
Who it applies to
Employees who participate in tax-sheltered annuity plans under section 403(b)
What changed this year, and why
For 2021, the IRS kept the elective deferral limit and the catch-up contribution limit unchanged from 2020.
Common questions
- What is the elective deferral limit for 2021?
- The elective deferral limit under section 402(g) is $19,500 for 2021, unchanged from 2020.
- Is there a catch-up contribution provision for older workers?
- Yes. Participants aged 50 or over may contribute an additional $6,500 as a catch-up contribution in 2021, unchanged from 2020.
The other ceiling: total contributions of 100% of pay
The limit on annual additions is the first of two ceilings that cap what can go into the account in a single year. It counts every dollar that flows in: salary-reduction deferrals, employer nonelective contributions, and any after-tax money you put in. For 2021 the hard cap is $58,000, but that number only matters if your pay is high enough to absorb it. The rule also says the limit is 100% of your includible compensation for your most recent year of service, so even a highly paid employee cannot have more contributed than he or she actually earned from the employer maintaining the account. Whichever of the two figures is smaller becomes the effective ceiling. If you work for more than one employer with separate plans, you do not add the accounts together for this test, but contributions to multiple accounts run by the same employer must be combined. Ministers and church employees may be subject to different aggregation rules, but the basic ceiling still runs through the same two-part test.
The limit on an- nual additions is generally the lesser of: • $57,000 for 2020 and $58,000 for 2021, or • 100% of your includible compensation for your most recent year of service.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
Two limits, and your MAC is the lesser of them
Your Maximum Amount Contributable (MAC) is the overall ceiling on contributions to your account each year. Your MAC is determined by both a limit on annual additions and a limit on elective deferrals, and it equals the lesser of them. The limit on elective deferrals is $19,500. The limit on annual additions is a separate cap based on your includible compensation for your most recent year of service. If your only contributions are elective deferrals, your MAC is the lesser of $19,500 or the annual additions limit. If both elective deferrals and employer nonelective contributions are made, you must calculate both limits and your MAC is the smaller result. Catch-up contributions of $6,500 for eligible participants sit on top of your MAC and are not counted against it.
Generally, contributions to your 403(b) account are limited to the lesser of: • The limit on annual additions, or • The limit on elective deferrals.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The 15 years of service catch-up almost nobody uses
This special catch-up provision serves employees of qualifying organizations including public and private schools, hospitals, home health service agencies, health and welfare service agencies, churches, and conventions or associations of churches. If you have at least 15 years of service with such an organization and your plan allows it, your elective deferral limit can be increased beyond $19,500. The increase equals the smallest of: $3,000; $15,000 minus prior catch-up amounts used under this rule; or a third calculation involving your total years of service and all prior elective deferrals. Despite being available, this provision is rarely used because the separate additional catch-up of $6,500 for older participants often provides a simpler and equally beneficial path. If you qualify for both this rule and the age-based catch-up, amounts are allocated first under this rule, then the remainder goes to the age-based catch-up.
15-Year Rule If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization) and it is allowed by the terms of the plan document, the limit on elective deferrals to your 403(b) ac- count is increased by the least of: 1. $3,000; 2. $15,000, reduced by the sum of:
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The age 50 catch-up sits on top of the limit
Participants who qualify for the catch-up can contribute above the regular $19,500 elective-deferral limit. For 2021 the maximum catch-up amount is the lesser of $6,500 or the excess of your compensation for the year over your non-catch-up elective deferrals. Your plan must allow catch-up contributions, and you must have already contributed the maximum $19,500 through salary reduction before any catch-up amounts can be added. These additional contributions are not counted against your MAC, so the total you can have contributed equals your MAC plus your allowable catch-up amount. If your employer maintains multiple plans for you, the total catch-up across all of them cannot exceed $6,500 for 2021. When more than one catch-up provision applies, the rules specify an ordering that must be followed before any amounts can be treated as catch-up contributions.
The maximum amount of catch-up contributions is the lesser of: • $6,500 for 2020 and 2021; or • The excess of your compensation for the year, over the elective deferrals that aren’t catch-up contributions.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
What to do when too much went in
If the actual contributions to your account (excluding catch-up contributions) exceed your Maximum Amount Contributable, you have an excess contribution. Excess contributions can result in income tax, additional taxes, and penalties depending on the type. There are two categories: excess annual additions and excess elective deferrals. An excess annual addition occurs when total contributions exceed the limit on annual additions. An excess elective deferral occurs when your salary reduction deferrals exceed the limit on elective deferrals. The IRS requires you to identify which type of excess you have, because the correction method and tax consequences differ. At the end of the year or beginning of the next, you should refigure your MAC using your actual compensation and actual contributions. If your employment status or compensation changes during the year, you should refigure your MAC with a revised estimate to prevent excess contributions from occurring in the first place. Certain excess contributions can be corrected if identified and handled properly.
If the actual contributions (not including catch-up contributions) to your account are greater than your MAC, you have excess contri- butions.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
You have until April 15 to correct an excess deferral
In the 2021 403(b) Contribution Limit published by IRS, you have until April 15 to correct an excess deferral. If you deferred more than the $19,500 elective deferral limit for the year, the plan can distribute the excess deferral - and any income allocable to the excess - no later than April 15 of the year following the year the excess deferral was made. For a 2021 excess, that deadline is April 15, 2022. If April 15 falls on a weekend or legal holiday, the deadline shifts to the next business day. You must notify the plan of the excess amount or designate a distribution as an excess deferral; the plan may require this notification in writing and may ask you to certify the amount. The plan is not required to permit a distribution of excess deferrals, so contact the plan administrator. Employees who are age 50 or over may also use the $6,500 catch-up, which increases the ceiling above the regular $19,500; any amount beyond that combined ceiling is an excess. Getting the excess out by the April 15 deadline determines the year in which it is taxed.
Correction of excess deferrals after the year. If you have excess deferrals for a year, you may receive a correcting distribution of the excess deferral no later than April 15 of the fol- lowing year. The plan can distribute the excess deferral (and any income allocable to the ex- cess) no later than April 15 of the year following the year the excess deferral was made.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
There is no form to file - your employer reports it on your W-2
Under the 2021 403(b) Contribution Limit published by IRS, you do not file a separate form to report your elective deferrals. Your employer reports the amounts on your Form W-2. Elective deferrals are shown in box 12 of the W-2, with code E for pre-tax amounts and code BB for Roth amounts. The Retirement plan box is checked in box 13. Because your employer handles the reporting, there is no additional form for you to file. The $19,500 you deferred (or the $6,500 catch-up if you are age 50 or over) is identified through the codes on the W-2, not through any filing of your own. Self-employed ministers and chaplains follow different rules and may need to report contributions as a deduction on their own tax return, but for most employees the W-2 is the sole channel through which the IRS learns about their 403(b) elective deferrals.
Your employer will report contri- butions on your 2020 Form W-2. Elective defer- rals will be shown in box 12 with code E for pre-tax amounts and code BB for Roth amounts, and the Retirement plan box will be checked in box 13.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
The 15-year catch-up has a lifetime cap that shrinks as you use it
For 2021, the 15-year rule lets eligible 403(b) participants defer up to $3,000 beyond the regular limit if they have at least 15 years of service with a qualifying employer such as a school, hospital, or church. However, this extra amount cannot exceed $15,000 reduced by the sum of prior catch-up contributions and regular elective deferrals already made. In other words, every dollar you previously deferred under this rule lowers the remaining lifetime cap. Once you have used up the $15,000 lifetime benefit through past catch-up deferrals, the 15-year rule no longer provides any additional contribution room, even if you still meet the 15-year service requirement. The rule applies only if the plan document permits it.
If you have at least 15 years of service with an educational organization (such as a public or private school), hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization) and it is allowed by the terms of the plan document, the limit on elective deferrals to your 403(b) ac- count is increased by the least of: 1. $3,000; 2. $15,000, reduced by the sum of:
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
Your limit is shared with every other elective-deferral plan you have
Under the 2021 403(b) Contribution Limit published by IRS, your elective deferral limit is shared across all retirement plans you participate in. If elective deferrals are made to other retirement plans on your behalf during the year, you must combine all of those deferrals to determine if they exceed your limit. This means the $19,500 annual elective deferral limit (plus the $6,500 catch-up if you are age 50 or over) applies to your total contributions across all plans, not separately to each one. The limit covers amounts contributed to 401(k) plans, Roth contribution programs, Section 501(c)(18) plans, SIMPLE plans, SARSEP plans, and all 403(b) plans. If you work for multiple employers or participate in multiple retirement plans, you are responsible for ensuring your total elective deferrals do not exceed the annual limit. Any excess deferrals must be removed by April 15 of the following year to avoid being taxed twice.
The limit on elective deferrals applies to amounts contributed to: • 401(k) plans, to the extent excluded from income; • Roth contribution programs; • Section 501(c)(18) plans, to the extent ex- cluded from income; • Savings incentive match plan for employ- ees (SIMPLE) plans; • Salary reduction simplified employee pen- sion (SARSEP) plans; and • All 403(b) plans.
Publication 571 (2021), Tax-Sheltered Annuity Plans (403(b) Plans) (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Notice 2020-79 (IRS)
- Elective deferral limit
The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) remains unchanged at $19,500.
- Catch-up limit, age 50 and over
The dollar limitation under § 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in § 401(k)(11) or § 408(p) for individuals aged 50 or over remains unchanged at $6,500.