SIMPLE IRA Max Compensation/Contribution
Clients are husband and wife. Owners of S-Corp. 200k salary for one and 60K salary for the other.
They will max out their contributions at 16K (I understand there is a 10% increase based on employees for 2024). However, regarding the match… I will have them match 3% of their salary. If the business makes an additional 400k for example, is there a limit to the match for each of them? (50/50 owners).
Permalink Submitted by Alan - IRA critic on Wed, 2024-07-10 18:32
The matching contribution is limited to the lesser of:
3% of W-2 wages for S Corp
The salary reduction contributions actually made by each spouse
Therefore, salary would have to be very high for the matching amount to be capped by the salary reduction contribution if the employee made the max contribution of 17,600.