re limited to an annual benefit to an employee of the lesser of $58,000 or 100% of the employee's average compensation for the highest three years. b. Defined contribution plan contributions are limited to the lesser of $230,000 or 25% of an employee's compensation. c. Defined contribution plan contributions are limited to the lesser of $58,000 or 100% of an employee's compensation.
re limited to an annual benefit to an employee of the lesser of $58,000 or 100% of the employee's average compensation for the highest three years. b. Defined contribution plan contributions are limited to the lesser of $230,000 or 25% of an employee's compensation. c. Defined contribution plan contributions are limited to the lesser of $58,000 or 100% of an employee's compensation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Which of the following statements is correct regarding limitations on employer's contributions to qualified retirement plans in 2021?
| a. |
Defined benefit plans are limited to an annual benefit to an employee of the lesser of $58,000 or 100% of the employee's average compensation for the highest three years. |
|
| b. |
Defined contribution plan contributions are limited to the lesser of $230,000 or 25% of an employee's compensation. |
|
| c. |
Defined contribution plan contributions are limited to the lesser of $58,000 or 100% of an employee's compensation. |
|
| d. |
If an employer has more than one type of qualified plan, a maximum deduction of 100% of compensation is allowed. |
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