A higher 401(k) ceiling will let eligible employees defer up to $25,500 from wages in 2027, compared with $24,500 in 2026.
The $25,500 limit also applies to 403(b) plans, governmental 457 plans and the federal Thrift Savings Plan. With the age-50 catch-up, an eligible participant could defer as much as $34,000 in 2027; for eligible participants ages 60 through 63, the maximum is $37,250.
The IRA ceiling remains $7,500. Account holders who are at least 50 may also use a $1,100 catch-up allowance, unchanged from 2026.
The IRS also announced a higher standard deduction and a $2,300 maximum child tax credit for 2027 in a separate tax update. The seven federal income-tax rates remain 10%, 12%, 22%, 24%, 32%, 35% and 37%, while their income thresholds rise from 2026. The agency said those income-tax figures generally apply to returns filed in 2028.
