SIMPLE IRA 2 Year Exception

Our business is going through a change of ownership. We had a profit sharing plan under the previous owner for many years and the plan has been terminated and all employees rolled their funds to traditional IRAs. The new owner plans on establishing a SIMPLE IRA plan. Her question is whether or not we would be able to receive an exception from the 2 year rule since most employees have already been participating in the profit sharing plan for many years.



There is no such exception available. The 2 year waiting period for each employee must start on the date of their first SIMPLE IRA contribution.

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