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Frequently Asked Question

What is the contribution limit for employee's in Puerto Rico?


On August 7, 2008, Act 186 amended the Puerto Rico Internal Revenue Code of 1994 to increase the annual limitation on pretax employee contributions to Puerto Rico qualified retirement plans with a cash or deferred arrangement ("Section 1165(e) plans"). Prior to the amendment, Section 1165(e) permitted employee pretax contributions up to a maximum of 10% of compensation or $8,000, whichever is less. As a result of Act 186, the percentage of pay limit is eliminated as of 2008 and the dollar amount is scheduled for gradual increases through 2013. Catch-up contributions are not permitted.

This is for educational purposes only. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.

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