re-hire and my SIMPLE IRA Plan.
Here is my plan rule: must have received compensation for previous 2 years of $5,000. And, expect to receive compensation of $5,000 in current year.
Fact pattern: re-hired employee in Nov 2011(will NOT exceed $5,000 in compensation). I terminated him in 2010, and, he did exceed the $5,000 compensation.
Am I correct in saying he must wait until 2014 before he can participate?
Permalink Submitted by Alan Spross on Tue, 2012-01-24 17:38
This employee did not reach 5k in either 2010 or 2011. Therefore, 2014 would be the first year IF he was first hired in 2010 OR if he did not earn 5k in any two years prior to 2010. However, if he reached 5,000 in ANY preceding two years, not just the two immediately preceding 2012, he would be eligible in 2012.
EG – if he reached 5k in 2007 and 2009. In that case he HAS two previous years of 5k in earnings and would be eligible in 2012 if expected to earn 5k in 2012.