Simple IRA plan requirements

Submitted by alberto vega on Sat, 2018-12-22 14:39

If and S corp employer has 7 full time employees including the sole owner and 1 part time employee, All under age 50
Company income before tax is about $400,000 after deducting $152,000 salary to owner. Employees’ salaries
excluding owner, range between $ 30,000 and $75,000; part timer employee about $ 18,000
What are the requirements for 2018 and 2019 and contribution limits for both the employer and employee:
1. Minimum employer has to contribute/match
2. Maximum employer could contribute/match
3. Minimum requirements to provide Simple IRA in terms of:
minimum age of participants; minimum time of service; minimum wages; minimum hours worked
4. Latest date plan can be established for 2018, for 2019? No other plans
5. Can S corp establish a Simple IRA and a 401k



Submitted by William Tuttle on Sat, 2018-12-22 23:44

  1. Minimum employer contributions:
  1. Match: 1% in 2 out of 5 years including the first 2.
  2. Nonelective: 2% regardless if the employee contributes or not.
  • Maximum employer contributions:
    1. Match: 3% and must be 3% for 3 out of 5 years.
    2. Nonelective: Same as mimimum.
  • All employees who received at least $5,000 in compensation from you 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, are eligible to participate in the SIMPLE IRA plan for the calendar year.
  • The latest date a SIMPLE IRA plan can be established for that tax year (2018 or 2919) is October 1st. Notice and open enrollment for the next year must occur prior to November 2nd to be effective on January 1st. A plan adopted any time from 11/3 – 10/1 will not be effective until 60 days after Notice and open enrollment.
  • No other plan can be maintained in the same calendar year as a SIMPLE IRA

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