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What is a SIMPLE-IRA?
What is a SIMPLE-IRA?
A SIMPLE (Savings Incentive Match Plan for Employees) IRA is a retirement plan that allows employers and employees of small businesses to make tax-deferred contributions to the plan.
Who can participate?
Who can participate?
Self-employed individuals, small-business owners, and any business with 100 or fewer employees that don't have another existing retirement plan.
Employer contribution limits
Option 1. Dollar-for-dollar match of employee contributions up to 3% of each employee’s compensation (which can be reduced to as low as 1% in any 2 of 5 years).
Option 2. A contribution of 2% of each employee's compensation. The maximum compensation used to determine this contribution is $305,000 for 2022 and $330,000 for 2023. Contributions are tax-deductible and are required every year.
Employee contribution limits
Employees can contribute up to $14,000 for the 2022 tax year and $15,500 for the 2023 tax year ($17,000 for the 2022 tax year and $19,000 for the 2023 tax year for employees age 50 and older).
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