The maximum contribution that can be made on behalf of an employee in a Keogh defined contribution money purchase plan is:
A)The lower of 15% of employee's taxable compensation or $55,000
B)The lower of 13.0435% of employee's taxable compensation or $55,000
C)The lower of 20% of employee's taxable compensation or $55,000
D)The lower of 25% of employee's taxable compensation or $55,000

Question

Quizplus · Accepted Answer

The maximum contribution that can be made on behalf of an employee in a Keogh defined contribution money purchase plan is the lower of 25% of the employee's taxable compensation or $55,000. This limit applies to all contributions, including employer and employee contributions.

The Maximum Contribution That Can Be Made on Behalf of an Employee