Are there any annual limits to how much of the Prevailing Wage Required Fringe a company can contribute to their 401(k) Pension Plan?

Yes, there are annual limits regarding how much of the Prevailing Wage Required Fringe a company can contribution to their 401(k) plan. To start, a contractor may deduct, on the company’s tax return, prevailing wage and other employer contributions to a 401(k) Pension Plan. The IRS limits the amount of the deduction to 25% of total pay. To determine total pay for the purposes of applying the limit, a contractor includes all pay of all employees who are eligible to participate in the 401(k) Pension Plan. If an employee is excluded from the plan for a particular purpose, then that employee’s pay may not be included for calculating the 25% limit.

Employee elective wage deferral contributions do not count against the 25% limit.