The Holden Corporation maintains a SIMPLE-IRA retirement plan for its employees. The company has notified its employees that for 2018 it will fund the SIMPLE-IRA by matching an employee's contribution up to a maximum of 3% of the employee's salary. Harrison's salary in 2018 is $50,000 and he contributed $2,000 to the plan. What amount must Holden contribute on Harrison's behalf?

Question

Quizplus · Accepted Answer

Holden will match up to 3% of Harrison's salary, which is $1,500 (3% x $50,000). Since Harrison contributed $2,000, Holden only needs to contribute up to the $1,500 limit to meet the 3% matching requirement. Therefore, the correct answer is C, $1,500.

The Holden Corporation Maintains a SIMPLE-IRA Retirement Plan for Its