2026 457(b) Contribution Limit
The 2026 457(b) Contribution Limit is $24,500.
Effective 2026-01-01Source: Notice 2025-67 (IRS)Verified 2026-09-01
Compared with 2025
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Deferral limit | $23,500 | $24,500 | +$1,000 (+4.3%) |
Who it applies to
Participants in eligible deferred compensation plans maintained by state and local government employers and tax-exempt organizations under section 457(e)(15) of the Internal Revenue Code
What changed this year, and why
Effective January 1, 2026, the annual deferral limit for eligible deferred compensation plans of state and local governments and tax-exempt organizations is $24,500. This limit, set under section 457(e)(15) of the Internal Revenue Code, was increased by a cost-of-living adjustment from the prior year.
Common questions
- Is there a catch-up provision for participants nearing retirement?
- Participants in these plans who are within three years of normal retirement age may be eligible to defer more than the standard annual limit under a separate catch-up provision.
Every amount on this page is a published figure rather than yours. The 457(b) contribution headroom 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 2026, the IRS limits how much you can defer into a governmental 457(b) plan to the lesser of $24,500 or your includible compensation for the year. That means if your includible compensation is below the dollar cap, your deferral limit is that lower figure rather than the full amount. Includible compensation is generally your Form W-2 wages plus any elective deferrals already made on your behalf. It covers salaries, professional-service fees, commissions, tips, bonuses, fringe benefits, and other amounts received for personal services performed during the year. The rule applies to employees of state or local governments and tax-exempt organizations who participate in a section 457 plan. No catch-up provision — whether the age 50 catch-up or the special three-year pre-retirement catch-up — can push total deferrals above the includible compensation you actually earned.
Includible compensation. Generally, this is your Form W-2 wages plus elective deferrals.
Publication 525 (2025), Taxable and Nontaxable Income (IRS)
The special catch-up in the last 3 years before normal retirement age
A section 457 plan may offer a special catch-up in the last 3 years before you reach normal retirement age under the plan. If the plan provides this increased limit, your deferral ceiling for each of those years becomes the lesser of 2 alternative amounts. First, the limit can be twice the basic annual limit - for 2026, that means twice $24,500. Second, the limit can be the basic annual limit of $24,500 plus any portion of the basic limit that went unused in earlier years, but this second alternative is permitted only if you are not also using the age-50-or-over catch-up contributions. You may use the special 3-year catch-up for any or all of the final 3 years before normal retirement age, but you must choose whichever of the 2 formulas produces the smaller result. This catch-up is generally more valuable than the age-50 catch-up for participants close to retirement whose prior-year deferrals were low, but the plan terms govern whether it is available at all.
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 ($47,000 for 2025), 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 (2025), Taxable and Nontaxable Income (IRS)
The age 50 catch-up, and who can use it
A governmental 457(b) plan in the United States may allow participants who are at least 50 years old to make catch-up elective deferrals on top of the regular $24,500 limit. You qualify for this age 50 catch-up if you reached age 50 by the end of the calendar year and no other elective deferrals can be made for you under the plan for that year because of limits or restrictions — meaning the regular deferral cap (or a lower plan-specific ceiling) has already been reached. When you meet both conditions, the plan may let you defer an additional amount above the regular limit. However, if you are also within three years of the plan's normal retirement age and the plan offers the special pre-retirement catch-up, that separate provision may produce a still higher limit, and the two catch-ups cannot be used together. The age 50 catch-up does not allow deferrals to exceed includible compensation.
No other elective deferrals can be made for you to the plan for the year because of lim- its or restrictions.
Publication 525 (2025), 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 2025-67 (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 $23,500 to $24,500.