SIMPLE IRA Match

Have a couple who own a business and we manage a SIMPLE plan for them. They made their 2017 deferrals of $15,500 each. We then met back during tax season this year and we were trying to come up with their 2017 3% match. They said they didn’t know their net earnings for 2017 yet to base their 3% match on. Their accountant had filled for an extension. I realized today, Oct. 22nd that their tax extension deadline was last week, Oct. 15th. I know the deadline to make this 3% match was probably October, 15th which I think is not fair since the net earnings were not even known until October, 15th. I just confirmed that they filed their taxes last week on, Oct. 15th. Is there any way for them to get that 2017 match in? Or is there no way around the deadline?



The deadline for making the matching contribution was 10/15 per Notice 98-4, Q G-6. Client should have arranged with the accountant to file the return or at least complete the compensation calculation early enough to meet the contribution deadline.  

So there is no way of paying some penalty and ammeding their taxes in order to make the contribution?

But the employer contributions are *required* to be made.  It seems to me that the employer contribution must be made in accordance with the following Fix-It Guide : https://www.irs.gov/retirement-plans/simple-ira-plan-fix-it-guide-you-made-incorrect-employer-contributions-for-eligible-employees

True, doesn’t the employer in theory owe this 3% match to them (even though they are the owners)?

Alan, it looks like you actually may have answered this question back in September now that I look through prior discussions. “SIMPLE IRA” 2018-09-25 12:34 “Yes, the owners are treated as employees and must receive the match. The tax deduction could only be clamied for the year in which the late matching contributions are made, if the original deadline is missed.”

Do you have anymore to add to whether the owners are required to contribute the 3% match even though it’s after the deadline?

The owners must make the contribution. However, making the contribution after the deadline appears to forfeit the deduction per Sec 404(m)(2). This section appears to void my 9/25 post indicating the deduction would be available in the year made, but the above cite calls that into question. Perhaps you or one of the other posters here could review the above section and indicate how they interpret it.  If there is no deduction, that would amount to a costly penalty for missing the deadline.

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