Mick Davids
Jul 19 1999, 04:04 PM
A new employee joined a firm which sponsors a SIMPLE IRA. The employee has particpated in the previous employers 401(k) this calendar year. What limit applies to the employee for deductions to the SIMPLE IRA?? Thanks, Mick
Fishchick
Jul 19 1999, 07:59 PM
The overall 1999 limit between the two plans is $10,000. The employee can defer up to $6000.00 in the SIMPLE IRA if that does not push him over $10,000 for the total of the 401k deferrals and the SIMPLE IRA deferrals.
In other words, the amount the employee can defer is $10,000 minus the previous 401k deferrals, but not more than $6,000 (or 100% of compensation, if less).
Gary Steven Lesser
Jul 20 1999, 01:55 AM
Agreed. [IRC Sec. 402(g)(3)]