2019 457(b) Contribution Limit
The 2019 457(b) Contribution Limit is $19,000.
Effective 2019-01-01Source: Notice 2018-83 (IRS)Verified 2026-08-29
Compared with 2018
| Item | 2018 | 2019 | Change |
|---|---|---|---|
| Deferral limit | $18,500 | $19,000 | +$500 (+2.7%) |
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)
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.