SIMPLE IRA Contributions
Hello,
I have a client that is currently looking to roll out a SIMPLE for their employees. The payroll software they use is currently taking the Gross Salary minus pre tax insurance and then calculating the SIMPLE contribution off of that figure. Does this seem to be correct?
Any help is greatly appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2021-02-17 22:37
Yes, per the IRS SImple IRA Fix It guide : “Generally, compensation means the sum of a participant’s wages, tips and other compensation subject to federal income tax withholding and elective deferral contributions the participant made to the SIMPLE IRA plan.”