Employer match maximum dollar amount for SIMPLE IRA for 2013
What is the maximum dollar amount employers can match for a SIMPLE under the 3% formula. For example, say the employee is making $300,000 per year, is their a cap on the dollar amount? Would the maximum that could be taken into consideration be $255,000 for purposes of calculating the match for 2013?
Permalink Submitted by Alan - IRA critic on Fri, 2014-04-11 18:17
There is no dollar earnings limit for purposes of employer matching, but the 255k limit applies if the employer is making non elective contributions.
Permalink Submitted by Jack Thomas on Fri, 2014-04-11 18:56
Thanks and not to be sarcastic, but just for purposes of trying to understand, if the emloyee makes 5 million, the match could potentially be $150,000?
Permalink Submitted by Alan - IRA critic on Fri, 2014-04-11 22:31
No. It’s a dollar for dollar match up to what the employee can defer, which is a max of 12,000 plus any catchup contribution. The match therefore stops at 12,000.