Harriet is an employee of Castiron Inc. and earns $200,000 in 2018. The maximum amount Castiron can contribute to a money purchase plan on behalf of Harriet is

Question

Quizplus · Accepted Answer

The maximum amount that can be contributed to a money purchase plan is 25% of the employee's compensation or $55,000 (whichever is less). Since Harriet earns $200,000, 25% of her compensation is $50,000, which is less than the $55,000 limit. Therefore, the maximum contribution that Castiron can make on her behalf is $50,000.

Harriet Is an Employee of Castiron Inc