SIMPLE IRA

Who it's for

• Businesses with 100 or fewer employees and self-employed individuals
• Available to sole proprietors, partnerships, C corporations,
  S corporations
  

Key advantages

• Salary deferral plan with less administration
• Electronic funding with customized contribution allocation for each participant

Who can contribute

• Funded by employee deferrals and employer contributions

2019 employee contribution limits

• Up to $13,000 in salary deferrals; $3,000 catchup contribution for those over age 50

2020 employee contribution limits

• Up to $13,500 in salary deferrals; $3,000 catchup contribution for those over age 50

2019 employer contribution limits

• The employer is generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. This requirement does not apply if the employer makes non-elective contributions instead


• Instead of matching contributions, an employer can choose to make non-elective contributions of 2% of each eligible employee’s compensation. If the employer makes this choice, it must make non-elective contributions whether or not the employee chooses to make salary reduction contributions.

2020 employer contribution limits

• The employer is generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. This requirement does not apply if the employer makes non-elective contributions instead


• Instead of matching contributions, an employer can choose to make non-elective contributions of 2% of each eligible employee’s compensation. If the employer makes this choice, it must make non-elective contributions whether or not the employee chooses to make salary reduction contributions.

Administrative responsibilities

• No employer tax filings;
  certain annual employee notifications must generally be made by November 1.

Access to assets

• Withdraw at any time, but a 10% penalty may apply if you are under age 59½. If the withdrawal is taken within first two years of participation in the plan, that penalty increases to 25%.

Plan setup deadlines

• Establish by October 1.