2024 457(b) Contribution Limit
For 2024, the 457(b) Contribution Limit figures are $23,000 (Deferral limit) and +$7,500 (Catch-up limit, age 50 and over).
Effective 2024-01-01Source: Notice 2023-75 (IRS)Verified 2026-09-04
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Deferral limit | $22,500 | $23,000 | +$500 (+2.2%) |
| Catch-up limit, age 50 and over | +$7,500 | +$7,500 | +$0 (+0.0%) |
Who it applies to
Participants in eligible deferred compensation plans under section 457 maintained by state and local governments or tax-exempt organizations.
What changed this year, and why
Under section 457(e)(15) of the Internal Revenue Code, the annual deferral limit for eligible deferred compensation plans of state and local governments and tax-exempt organizations increased to $23,000, effective January 1, 2024. The prior-year limit was lower.
Common questions
- Who is subject to this deferral limit?
- The limit applies to eligible deferred compensation plans maintained under section 457 of the Internal Revenue Code by state and local governments or tax-exempt organizations.
- How does the 2024 limit compare to prior years?
- The prior-year limit was lower. The 2024 limit reflects the annual cost-of-living adjustment published in IRS Notice 2023-75.
Every amount on this page is a published figure rather than yours. The 457(b) contribution planner takes the number you enter and works it out against them, showing which published figure it used.
Your limit is the lesser of the dollar cap and your includible compensation
For 2024, the maximum amount you may defer into a section 457 plan is $23,000, but only if your includible compensation for the year is at least that much. If you earned less than the cap, your deferral limit is restricted to what you actually earned - you cannot defer more than your includible compensation even though the dollar ceiling is higher. Includible compensation is generally your Form W-2 wages plus any elective deferrals already made for the year. It covers salaries, fees, bonuses, commissions, tips, certain fringe benefits, and employer contributions to other deferred compensation arrangements such as qualified retirement plans, SIMPLE plans, cafeteria plans, and tax-sheltered annuities. Employers may alternatively measure includible compensation using wages subject to income-tax withholding, wages reported on Form W-2, or wages subject to social-security withholding. The rule applies to participants in section 457 plans, which are deferred-compensation arrangements maintained by state or local governments and tax-exempt organizations. This cap is coordinated with the overall elective-deferral limit that applies across all of a participant's plans, so deferrals under a section 457 count toward that aggregate ceiling.
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 organ- izations), you should have deferred no more than the lesser of your includible compensation or $23,000 in 2024.
Publication 525 (2024), Taxable and Nontaxable Income (IRS)
The special catch-up in the last 3 years before normal retirement age
In the three calendar years ending immediately before you reach the plan's normal retirement age, a deferred compensation plan may offer a special catch-up that lets you defer more than the regular annual cap. For 2024, the catch-up limit is the lesser of two calculations. The first is twice the basic annual limit, which is $46,000 for 2024. The second is the basic annual limit for 2024 plus the portion of the basic limit that went unused in all earlier years of participation in the plan - but this second option is available only if you are not also using the age-50-or-over catch-up contributions described separately. You must compare the two results and take the lower one; you cannot simply add unused amounts on top of the doubled figure. The catch-up is per-plan and not automatic, so the plan document must specifically provide for it. Participants who are both within three years of normal retirement age and age 50 or older must choose which catch-up produces the higher deferral room, because the two provisions cannot be combined.
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 ($46,000 for 2024), 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 (2024), Taxable and Nontaxable Income (IRS)
The age 50 catch-up, and who can use it
Participants in a governmental section 457 plan who are at least 50 years old may make additional catch-up deferrals on top of the regular annual limit, provided two conditions are met. First, you must have reached age 50 by the end of the calendar year. Second, no other elective deferrals can be made for you to the plan for the year because of limits or restrictions - meaning you must already be maxing out under another provision, such as a plan-imposed cap or the includible-compensation ceiling, before the age-50 catch-up can apply. If you satisfy both conditions, your deferral ceiling for 2024 becomes the lesser of your includible compensation or $23,000, plus an additional $7,500. The catch-up is available only through governmental 457 plans; employees of tax-exempt organizations under section 457(b) do not have access to this provision. If you are also within three years of the plan's normal retirement age and the plan offers the separate three-year catch-up, that alternative limit may be higher, but the two cannot be stacked - you must use whichever produces the greater deferral room for the year.
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 lim- its or restrictions. If you qualify, your limit can be the lesser of your includible compensation or $23,000, plus $7,500.
Publication 525 (2024), Taxable and Nontaxable Income (IRS)
The window to pull out an excess deferral closes April 15
If you defer more than $23,000 into a governmental section 457(b) plan in 2024, the excess is an excess deferral. You must notify your plan of the amount to be removed, and the plan must pay it out to you - along with any income earned on that amount - by April 15 of the year after the deferral was made. If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. The excess deferral must be included in your income for the year it was deferred. If the excess is distributed to you by the April 15 deadline, you do not include it in income again when you receive it. If you miss the deadline, the excess stays in the plan and you face double taxation: once when you contributed it and again when you eventually receive it as a distribution.
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 (2024), Taxable and Nontaxable Income (IRS)
There is no form to file - your employer reports it on your W-2
Elective deferrals to a governmental section 457(b) plan are not reported as wages in box 1 of the employee's Form W-2. Instead, the employer marks the "Retirement plan" checkbox in box 13 of the W-2 and reports the total amount deferred in box 12, using the appropriate code. The employee does not file a separate form with the IRS to report these deferrals; the employer's W-2 reporting is the mechanism by which the IRS tracks them. For 2024, the deferral limit is $23,000. This reporting arrangement means that as long as the employer correctly marks the retirement plan checkbox and shows the deferred amount, the employee has no additional filing obligation specific to making the deferral itself.
Your employer gen- erally shouldn't include elective deferrals in your wages in Form W-2, box 1. 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 (2024), Taxable and Nontaxable Income (IRS)
You cannot combine the 3-year catch-up's unused-limit option with the age-50 catch-up
A participant in a governmental section 457(b) plan who is in the three years immediately before the plan's normal retirement age may be eligible for two different catch-up provisions: the special 457(b) catch-up based on unused prior-year deferral room, and the age-50 catch-up available to participants age 50 or older. However, these two catch-ups cannot be used at the same time. The special 457(b) catch-up is allowed only if the participant is not also using the age-50-or-over catch-up contributions. A participant must choose one or the other; combining both in the same year is not permitted. For 2024, the basic deferral limit is $23,000.
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 ($46,000 for 2024), 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 (2024), Taxable and Nontaxable Income (IRS)
Leave the excess in the plan and it is taxed twice
If an excess deferral - that is, a deferral above the $23,000 limit for 2024 - is left in a governmental section 457(b) plan instead of being distributed by the April 15 deadline, the employee is taxed twice on that amount. The excess was already included in the employee's taxable income for the year it was deferred, so tax was paid on it then. Because the employee did not withdraw it in time, it cannot be treated as after-tax basis in the plan. When the amount is eventually distributed from the plan, it is taxed again as ordinary income. This double taxation is the penalty for failing to remove an excess deferral by the deadline. The rule does not apply if the excess deferral was a designated Roth contribution, since Roth contributions are already after-tax.
Therefore, you're taxed twice on the excess deferral left in the plan—once when you contribute it, and again when you receive it as a distribution (unless the excess deferral was a designated Roth contri- bution).
Publication 525 (2024), 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 (2024), 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 2023-75 (IRS)
- Deferral limit
The limitation on deferrals under section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $22,500 to $23,000.
- Catch-up limit, age 50 and over
The dollar limitation under section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) for individuals aged 50 or over remains $7,500.