The deadline for starting a SIMPLE plan for your business is quickly approaching. Employers have until October 1st to set up a plan effective for 2021. If you have a business that has no retirement plan set up and less than 100 employees a SIMPLE plan could make a whole lot of sense.
Here’s the quick hits on what makes an employer eligible to establish a SIMPLE plan:
Fewer than 100 employees that made $5,000.00 or more in the prior year.
No other plans are sponsored by the employer. (This means no 401(k), 403(b), or anything else)
SIMPLE plans usually have no cost to set up and there is no requirement to file IRS Form 5500. The employer may opt to make contributions on behalf of the employees. They can either choose to make fully vested, dollar-for-dollar matching contributions up to 3% (but not less than 1%) of the employee’s’ compensation or make fully vested, non-elective contributions for their employees of 2% of their pay.
We can help your company establish a SIMPLE plan. These plans can be great, low cost alternatives to 401(k) plans. Give us a call today.