SIMPLE IRA compensation (partial plan year)
New SIMPLE plan that will be starting 10/1
elected 3% match for 2019 plan year
The question is, if the plan is established on October 1st (instead of Jan. 1st) would the employer still have to make a match based on the entire year’s compensation, or would it be based on the time in which the plan was actually in existence?
This is the closest I could find to any sort of guidance. Q & A was pulled from IRS Notice 98-4
What employer matching contribution is generally required under a SIMPLE IRA Plan?
Under a SIMPLE IRA Plan, an employer is generally required to make a contribution on behalf of each eligible employee in an amount equal to the employee’s salary reduction contributions, up to a limit of 3 percent of the employee’s compensation for the entire calendar year
Permalink Submitted by Alan - IRA critic on Tue, 2019-08-13 20:47
The match would be 3% of what the employee’s full annual salary would have been, but not more than the amount that the employee actually contributed during the 3 months worked.