PLEASE NOTE: 5498 Tax Forms are now available in the Client Portal
Forge Trust
PLEASE NOTE: 5498 Tax Forms are now available in the Client Portal
PLEASE NOTE: 5498 Tax Forms are now available in the Client Portal

SIMPLE IRA

A Savings Incentive Match Plan for Employees (SIMPLE IRA) allows individuals and small businesses with 100 or fewer employees to set aside money in tax-advantaged retirement accounts.

Key Advantages:

Is this retirement account right for you?

Salary deferral plan easily established with less administration

Electronic funding with customized contribution allocation for each participant

Can be paired with other retirement accounts

Eligibility:

  • Available to businesses with 100 or fewer employees and self-employed individuals
  • Includes sole proprietors, partnerships, C corporations, S corporations
  • IRS Form 5304-SIMPLE to accompany account application

Funding the Account:

  • Employer must contribute
  • Employee may contribute

2020 & 2021 Employee Contribution Limits:

  • Up to $13,500 in salary deferrals; $3,000 catch-up contribution if age 50 or older

2020 & 2021 Employer Contribution Limits:

2020 & 2021 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 up to the annual limit of $290,000 for 2021; $285,000 for 2020. If the employer makes this choice, it must make non-elective contributions whether or not the employee chooses to make salary reduction contributions.

Withdrawals:

  • Withdraw at any time but a 10% penalty may apply if you are under age 59 ½. If the withdrawal is taken within the first two years of participation in the plan that penalty increases to 25%.
  • Withdrawals are included in income.
  • Required Minimum Distributions (RMDs) start at age 72 (as of 2020)

Administrative responsibilities:

  • Employer generally has no filing requirements, and does not need to file an annual Form 5500 return.
  • Certain annual employee notifications must generally be made by November 1.

Plan setup deadline:

  • Establish by October 1

For more information visit IRS - SIMPLE IRA Plan

Key Advantages:

Salary deferral plan easily established with less administration

Electronic funding with customized contribution allocation for each participant

Can be paired with other retirement accounts

Is this retirement account right for you?

Eligibility:

  • Available to businesses with 100 or fewer employees and self-employed individuals
  • Includes sole proprietors, partnerships, C corporations, S corporations
  • IRS Form 5304-SIMPLE to accompany account application

Funding the Account:

  • Employer must contribute
  • Employee may contribute

2020 & 2021 Employee Contribution Limits:

  • Up to $13,500 in salary deferrals; $3,000 catch-up contribution if age 50 or older

2020 & 2021 Employer Contribution Limits:

2020 & 2021 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 up to the annual limit of $290,000 for 2021; $285,000 for 2020. If the employer makes this choice, it must make non-elective contributions whether or not the employee chooses to make salary reduction contributions.

Withdrawals:

  • Withdraw at any time but a 10% penalty may apply if you are under age 59 ½. If the withdrawal is taken within the first two years of participation in the plan that penalty increases to 25%.
  • Withdrawals are included in income.
  • Required Minimum Distributions (RMDs) start at age 72 (as of 2020)

Administrative responsibilities:

  • Employer generally has no filing requirements, and does not need to file an annual Form 5500 return.
  • Certain annual employee notifications must generally be made by November 1.

Plan setup deadline:

  • Establish by October 1

For more information visit IRS - SIMPLE IRA Plan

IRS Contribution Limits

Each year the IRS reviews and sometimes adjusts how much you can contribute to retirement accounts. See how much you are allowed to contribute by account type.

Open a SIMPLE IRA