2019 457(b) Contribution Limit
For 2019, the 457(b) Contribution Limit figures are $19,000 (Deferral limit) and +$6,000 (Catch-up limit, age 50 and over).
Effective 2019-01-01Source: Notice 2018-83 (IRS)Verified 2026-09-04
Compared with 2018
| Item | 2018 | 2019 | Change |
|---|---|---|---|
| Deferral limit | $18,500 | $19,000 | +$500 (+2.7%) |
| Catch-up limit, age 50 and over | +$6,000 | +$6,000 | +$0 (+0.0%) |
Who it applies to
Participants in section 457(b) deferred compensation plans sponsored by state and local governments and tax-exempt organizations.
What changed this year, and why
For 2019, the elective deferral limit under section 457(b) deferred compensation plans increased to $19,000, effective January 1, 2019.
Common questions
- What is the section 457(b) contribution limit for 2019?
- The deferral limit under section 457(b) is $19,000 for 2019, effective January 1, 2019.
Your limit is the lesser of the dollar cap and your includible compensation
For 2019, the overall elective deferral cap for participants in a section 457 plan - a deferred compensation arrangement for employees of state or local government employers or tax-exempt organizations - is $19,000. However, that dollar figure is only half the test. Your deferrals for the year are also capped by your includible compensation, which is generally the wages and other pay you receive from the employer for personal services plus any elective deferrals already made for you to the plan and certain employer contributions to related plans excluded from income. The amount you may actually defer is the lesser of these two figures, so an employee whose includible compensation for the year falls below $19,000 can defer only up to that lower amount. Deferrals above either ceiling are excess deferrals that must be corrected. The limit applies across all section 457 plans you participate in for the year and does not stack across multiple plans. This dollar cap may be increased in the three years before normal retirement age under a special catch-up, or for participants age 50 or older under a separate catch-up, but only if the plan permits.
Limit for deferrals under section 457 plans. If you're a participant in a section 457 plan (a deferred compensation plan for employees of state or local governments or tax-exempt or- ganizations), you should have deferred no more than the lesser of your includible compensation or $19,000 in 2019.
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
The special catch-up in the last 3 years before normal retirement age
Section 457 plans may allow a special catch-up for participants in the final three years before reaching normal retirement age under the plan. During any - or all - of those last three years, the plan can raise the deferral limit above the regular annual amount. When the plan provides this increased limit, the new cap is the lesser of two figures: (1) twice the annual limit, which for 2019 is $38,000, or (2) the basic annual limit plus the amount of the basic limit that was not used in prior years. The second option is permitted only if the participant is not also using the age-50-or-over catch-up contributions; the two catch-ups cannot be combined, so a participant must choose whichever produces the larger deferral room for the year. The special catch-up is available only if the employer's plan includes the provision and defines the participant's normal retirement age. It is designed to help employees who were unable to defer the full annual limit in earlier years make up that unused room shortly before retiring.
Increased limit. During any, or all, of the last 3 years ending before you reach normal re- tirement age under the plan, your plan may pro- vide that your limit is the lesser of: 1. Twice the annual limit ($38,000 for 2019), or 2. 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).
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
The age 50 catch-up, and who can use it
Participants in a governmental section 457 plan who have reached age 50 may be eligible for an additional catch-up contribution on top of the regular deferral limit. To qualify, two conditions must be met: you must have reached age 50 by the end of the calendar year, and no other elective deferrals can be made for you to the plan for that year because of other plan limits or restrictions. If you satisfy both conditions, your deferral limit becomes the lesser of your includible compensation, or $19,000 plus $6,000, allowing a higher deferral ceiling for the year while still subject to the includible compensation cap. This age-50 catch-up is separate from the special three-year pre-retirement catch-up; a participant cannot use both at the same time and must determine which produces the larger available deferral room. The catch-up ensures that older workers approaching retirement have an opportunity to increase their savings in the years immediately before they stop working. The additional $6,000 is available each year the participant continues to meet the eligibility conditions.
Catch-up contributions. You can gener- ally have additional elective deferrals made to your governmental section 457 plan if: • You reached age 50 by the end of the year, and • No other elective deferrals can be made for you to the plan for the year because of limits or restrictions. If you qualify, your limit can be the lesser of your includible compensation or $19,000, plus $6,000.
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
The window to pull out an excess deferral closes April 15
If you deferred more than the annual limit into your governmental 457(b) plan, you must have the excess amount distributed to you by April 15 of the year following the year you made the excess deferral. The plan will pay you the excess together with any income it earned while it sat in the account. If you participate in more than one plan, you may have the excess paid out of any of the plans that permit corrective distributions, but you must notify each plan by the date that plan requires. You must also include the excess deferral in your income for the year you originally deferred it, not the year you withdraw it. If you fail to remove the excess by the April deadline, the amount remains in the plan and you lose the chance to correct the over-deferral on a timely basis.
The plan must then pay you the amount of the ex- cess, along with any income earned on that amount, by April 15 of the following year.
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
There is no form to file - your employer reports it on your W-2
There is no separate form you file with the IRS to report your 457(b) elective deferrals. Instead, your employer handles the reporting. Your employer generally should not include your elective deferrals in your wages in box 1 of Form W-2. Instead, your employer should mark the Retirement plan checkbox in box 13 and show the total amount you deferred in box 12 of your W-2. This means you do not need to take any extra step to report the deferral on your tax return beyond what your employer has already documented. The amounts deferred are excluded from your federal income tax withholding but are still subject to social security and Medicare taxes.
Reporting by employer. Your employer gen- erally shouldn't include elective deferrals in your wages in box 1 of Form W-2. Instead, your em- ployer should mark the Retirement plan check- box in box 13 and show the total amount defer- red in box 12.
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
The 3-year catch-up lets you use limit you did not use in earlier years
During any, or all, of the last 3 years ending before you reach normal retirement age under the plan, your governmental 457(b) plan may provide that your limit is the lesser of twice the annual limit or the basic annual limit plus the amount of the basic limit not used in prior years. This special catch-up lets you make up for deferrals you could have made in earlier years but did not, subject to the twice-the-limit ceiling. The provision is available only to participants in governmental section 457 plans and is calculated based on actual unused deferral room from years when you were eligible to defer but chose not to use the full amount available to you. Only allowed if not using age 50-or-over catch-up contributions, this catch-up cannot be combined with the age-50 catch-up in the same year.
During any, or all, of the last 3 years ending before you reach normal re- tirement age under the plan, your plan may pro- vide that your limit is the lesser of: 1. Twice the annual limit ($38,000 for 2019), or 2. 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).
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
Leave the excess in the plan and it is taxed twice
If you do not withdraw an excess deferral from your governmental 457(b) plan by the April deadline, you are taxed twice on that amount. You are taxed once when you contribute it because you must include the excess deferral in your income for the year of the deferral. Then you are taxed again when you eventually receive it as a distribution from the plan. Additionally, you cannot include the excess amount in the cost of the contract even though you already included it in your income. The only exception is if the excess deferral was a designated Roth contribution, which follows different tax rules. To avoid this double tax, make sure to have the excess distributed by the April deadline along with any income earned on it.
you're taxed twice on the excess deferral left in the plan
Publication 525 (2019), Taxable and Nontaxable Income (IRS)
A 457(b) limit does not share room with a 401(k) or 403(b)
IRS Publication 525 groups elective deferral plans into two sets for the annual limit. The first three plan types on its list - a section 401(k) plan, the Thrift Savings Plan, and a salary reduction SEP - share one combined limit. A section 457 plan is the seventh type on that same list, grouped instead with a SIMPLE plan, a section 403(b) plan, and a section 501(c)(18)(D) plan, each of which the publication says has its own specific plan limit rather than a share of the first group's combined figure. Because the publication treats a section 457 plan's limit as one of these separate, specific plan limits rather than folding it into the combined figure for the first group, a worker who defers into both a section 401(k) plan and a governmental section 457 plan in the same year is measured against two separately stated limits rather than one shared figure split between the two accounts. The same separation holds between a section 457 plan and a section 403(b) plan, since a section 403(b) plan is also one of the specific-limit plan types rather than part of the combined group.
of contributions to the plans listed in (1) through (3), earlier, unless you are 50 or older. The specific plan limits for the plans listed in (4) through (7), earlier, are discussed later.
Publication 525 (2019), Taxable and Nontaxable Income (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 2018-83 (IRS)
- Deferral limit
The limitation on deferrals under § 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $18,500 to $19,000.
- 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 $6,000.