2022-2023 TSP Contribution LimitsUpdated: December 23, 2022
The Internal Revenue Service has announced 2022 Thrift Savings Plan (TSP) contributions limits.
In 2023, Thrift Savings Plan participants can contribute up to $22,500 in elective deferrals, according to the Internal Revenue Service. Participants age 50 and older can make an additional $7,500 contribution, for a total of $30,000.
The IRS announced the TSP contribution limit increase in October 2022. TSP participants under age 50 can contribute $20,500 in 2022. Participants over age 50 can make an additional $6,500 catch-up contribution until the end of the 2022 tax year.
The IRS bases Thrift Savings Plan contribution limit adjustments on the cost-of-living index and IRS regulations. The new TSP limits take effect on the first calendar day of the new year, Jan. 1, 2023.
2022-2023 Thrift Savings Plan Contribution Limits
|Elective deferral limit||$20,500||$22,500||IRC §402(g)||The Elective deferral limit applies to the combined total of traditional and Roth contributions. For members of the uniformed services, it includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay and bonus pay but does not apply to traditional contributions made from tax-exempt pay earned in a combat zone.|
|Annual addition limit||$61,000||$66,000||IRC §415(c)||An additional limit imposed on the total of all contributions made on behalf of an employee in a calendar year. This limit is per employer and includes employee contributions (tax-deferred, after-tax, and tax-exempt), agency/service automatic (1%) contributions and matching contributions. For 415(c) purposes, working for multiple federal agencies and/or services in the same year is considered having one employer.|
|Catch-up contribution limit||$6,500||$7,500||IRC §414(v)||The catch-up contribution limit is the The maximum amount of catch-up contributions that can be contributed in a given year by participants aged 50 and older. It is separate from the elective deferral and annual additions limit imposed on regular employee contributions.|
Participants can contribute to a traditional or Roth TSP or split contributions between both accounts.
Thrift Savings Plan Contribution Limits: Elective Deferral Limit
The 2022 elective deferral limit is $20,500, a $1,000 increase from 2021. In 2023, the elective deferral limit will increase another $2,000 to $22,500.
The elective deferral limit applies to the combined total of your contributions to Roth and traditional TSP programs.
Service members cannot contribute $22,500 to each program in 2023. The limit indicates the amount you can contribute to one or both TSP accounts.
This limit “includes all traditional and Roth contributions from taxable basic pay, incentive pay, special pay and bonus pay,” according to the Thrift Savings Plan website. However, elective deferral limits do not apply to “traditional contributions made from tax-exempt pay earned in a combat zone.
Thrift Savings Plan Annual Additions Contribution Limit
The annual additions limit will increase to $66,000 in 2023, up from $61,000 in 2021.
If you’re under 50 years old, the annual additions limit applies to your elective deferrals, employer contributions, agency matching contributions and all other contributions made on your behalf.
The annual additions limit applies per employer. As long you work for a federal agency, the IRS considers you to have one employer.
Thrift Savings Plan Contribution Limits: Catch-up Contribution Limit aka Spillover Method
The catch-up contribution limit for employees and uniformed service members aged 50 or older is $7,500 for 2023, up from $6,500 in 2022.
Catch-up contribution limits are separate from elective deferral and annual addition limits.
Spillover Method Updates
Beginning Jan. 1, 2021, the TSP stopped using Form TSP-1-C, TSP-U-1-C or special payroll records that designate contributions as catch-up. Employing agencies and services now submit catch-up contributions on the same payroll records as regular contributions. Contributions continue until catch-up eligible participants reach the combined elective deferral and catch-up limit for the year.
What Military Members Need to Know About Roth TSP Contributions
Roth TSP contributions are subject to the elective deferral limit, regardless of whether such contributions are from taxable or tax-exempt pay.
To contribute tax-exempt pay toward the annual additions limit, you must choose the traditional TSP option.
If you are eligible to make catch-up contributions and draw combat-zone tax-free pay, you cannot make a catch-up contribution to a traditional TSP. You must make it to the Roth TSP instead.
Rules for Guardsmen and Reserve Service Members Contributing to a Military and Civilian TSP
Contributing to a TSP and a civilian retirement plan does not exempt you from the annual limits.
If you contribute to both a military and civilian TSP account, the sum of your contributions to both accounts cannot exceed the total annual limit. Furthermore, reservists on active duty making TSP contributions from tax-exempt combat zone pay are subject to the annual additions limit.
Who Is Eligible to Contribute to the TSP?
Federal government employees (both military and civilian) are eligible to open and contribute to a Thrift Savings Plan. In general, applicants must be:
- Federal Employees Retirement System (FERS) employees hired on or after Jan. 1, 1984
- Civil Service Retirement System employees hired before Jan. 1, 1984, who did not choose to convert to FERS
- Members of the U.S. military
- Civilians listed as working in “certain other categories” of federal government service
If you had a break in service with the federal government, you may be able to resume your previous TSP account contributions if you were gone for 30 days or less. If you had a longer break in service, TSP will automatically enroll you in a new TSP.
If you did not enroll in the TSP before you left government service, you must enroll in the TSP when you return to begin making contributions.
Thrift Savings Plan Contribution Limit History
|Year||Annual Contribution Limit||Max Catch-Up Contribution Limit||Annual Addition Limit||Annual Addition Limit With Catch-Up Contribution|