On November 4, 2021 the IRS issued Notice 2021-61 which provides the cost-of-living adjustments (COLAs) for IRAs for 2022. The adjustments affected the modified adjusted gross income (MAGI) levels for determining both Roth IRA contribution eligibility and Traditional IRA deductibility.
The annual Traditional IRA and Roth IRA contribution limit remains unchanged at $6,000 (plus $1,000 catch-up contribution for individuals age 50 or older) for 2022. The Traditional IRA deductibility MAGI phase-out ranges are as follows: $68,000 to $78,000 (up from $66,000 to $76,000) for an active participant in an employer plan who is a single taxpayer or head of household; $109,000 to $129,000 (up from $105,000 to $125,000) for an active participant who is a married taxpayer and filing jointly; and $204,000 to $214,000 (up from $198,000 to $208,000) for an individual who is not an active participant but filing jointly with a spouse who is an active participant. For individuals who are married and filing separately, the phase-out range remains unchanged at $0 to $10,000. Roth IRA contribution MAGI phase-out ranges for 2022 are as follows: $129,000 to $144,000 (up from $125,000 to $140,000) for single and head of household individuals and $204,000 to $214,000 (up from $198,000 to $208,000) for married filing jointly individuals. For individuals who are married and filing separately, the phase-out range remains unchanged at $0 to $10,000.
The maximum SEP contribution limit for 2022 is $61,000 which is up from the 2021 limit of $58,000. The compensation limit for SEP contributions and nonelective SIMPLE contributions is $305,000 (up from the 2021 limit of $290,000). The maximum compensation that may be required to be eligible to receive a SEP contribution for 2022 remains unchanged at $650. The annual SIMPLE IRA plan salary deferral limit for 2022 is $14,000 (up from $13,500 for 2021). Participants age 50 or older may make additional (catch-up) contributions of $3,000 which puts their SIMPLE IRA plan salary deferral limit for 2022 at $17,000 (up from $16,500 for 2021).