SIMPLE IRA Eligibilty

Submitted by Kevin Zoltek on Tue, 2016-02-09 21:01

My company has limited eligibility for 2 years prior and current year of compensation of $5,000 or more. I received more than $5,000 wages from the same firm in 2014, 2015 and reasonably expect to receive $5,000 or more in 2016. But, I have a termination date and rehire date in 2015. Am I eligible to contribute in 2016?



Submitted by Alan - IRA critic on Tue, 2016-02-09 22:45

Yes. The following is from Notice 98-4: 

C. EMPLOYEE ELIGIBILITY TO PARTICIPATE IN A SIMPLE IRA PLAN Q. C-1: Which employees of an employer must be eligible to participate under the SIMPLE IRA Plan? A. C-1: If an employer establishes a SIMPLE IRA Plan, all employees of the employer who received at least $5,000 in compensation from the employer during any 2 preceding calendar years (whether or not consecutive) and who are reasonably expected to receive at least $5,000 in compensation during the calendar year, must be eligible to participate in the SIMPLE IRA Plan for the calendar year. 

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