Publication 590, Individual Retirement Arrangements (IRAs); Chapter 5 - Savings Incentive Match Plans for Employees (SIMPLE), What Is a SIMPLE Plan?

V. Preparing Your Tax Return(s) and Information Returns

XI. Alerts and Tutorials

Update

ERROR MSGWhat Is a SIMPLE Plan?
A SIMPLE plan is a tax-favored retirement plan that certain smallemployers (including self-employed individuals) can set up for thebenefit of their employees. See Publication 560for information on therequirements employers must satisfy to set up a SIMPLE plan.
A SIMPLE plan is a written agreement (salary reductionarrangement) between you and your employer that allows you, ifyou are an eligible employee (including a self-employed individual),to choose to:
Reduce your compensation by a certain percentage each payperiod, and
Have your employer contribute the salary reductions to aSIMPLE IRA on your behalf. These contributions are called salaryreduction contributions.
All contributions under a SIMPLE IRA plan must be made to SIMPLEIRAs, not to any other type of IRA. The SIMPLE IRA can be anindividual retirement account or an individual retirement annuity,described in chapter 1 accommodation in Eskilstuna.Contributions are made on behalf ofeligible employees. (See Eligible Employees,later.) Contributions are also subject to various limits.(See How Much Can Be Contributed on My Behalf?, later.)
In addition to salary reduction contributions,hotel reviews Hvolsvollur youremployer must make either matching contributions ornonelective contributions. See How Are ContributionsMade?, later.
Eligible Employees
You must be allowed to participate in your employer's SIMPLE planif you:
Received at least $5,000 in compensation fromyour employer during any 2 years prior to the current year, and
Are reasonably expected to receive at least $5,000 incompensation during the calendar year for which contributions aremade.
Self-employed individual.hôtels MaastrichtFor SIMPLE plan purposes, the term employee includes aself-employed individual who received earned income.
Excludable employees.Your employer can exclude the following employees fromparticipating in the plan.
Employees whose retirement benefits are covered by acollective bargaining agreement (union contract).
Employees who are nonresident aliens and received no earnedincome from sources within the United States.
Employees who would not have been eligible employees if anacquisition, disposition, or similar transaction had not occurredduring the year. See Publication 560for more information.
Employee compensation.For purposes of the plan rules, your compensation for a yeargenerally includes the following:
Wages, tips, and other pay from the employer that is subjectto income tax withholding, and
Deferred amounts elected under any 401(k) plans, 403(b)plans, government (section 457(b)) plans, SEP plans, and SIMPLEplans.
Self-employed individual compensation.For purposes of the plan rules, if you are self-employed, yourcompensation for a year is your net earnings from self-employment(line 4, Section A of Schedule SE (Form 1040)) before subtracting anycontributions made to a SIMPLE IRA on your behalf.