How do I fill out a 5304-simple?

How do I fill out a 5304-simple?

How to Fill Out the Form

  1. Provide the Name of the Company.
  2. Choose the Eligibility Requirements.
  3. Indicate Whether There Are Excludable Employees.
  4. Extend the Period for Modifying the Contributions.
  5. Prohibit the Employee to Terminate a Salary Reduction Election at any Time.
  6. Indicate Contributions Amount.

What is 5304 simplified?

Form 5304-SIMPLE is a model Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) plan document that an employer may use to establish a SIMPLE IRA plan described in section 408(p), under which each eligible employee is permitted to select the financial institution for his or her SIMPLE IRA.

What is the difference between Form 5304 and 5305?

Use Form 5304-SIMPLE if you permit plan participants to select the financial institution to receive their SIMPLE IRA plan contributions. Use Form 5305-SIMPLE if you require all contributions under the SIMPLE IRA plan to be initially deposited at a financial institution you designate.

What Is a SIMPLE IRA plan document?

More In Retirement Plans A SIMPLE IRA plan (Savings Incentive Match PLan for Employees) allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.

How do I close a SIMPLE IRA?

To terminate a SIMPLE IRA plan, notify the financial institution that you will not make a contribution for the next calendar year and that you want to terminate the contract or agreement. You must also notify your employees that the SIMPLE IRA plan will be discontinued.

Can a new employee contribute to a SIMPLE IRA?

SInce the new employee does not have any prior year compensation, they are not eligible in 2016. However, if they earn 5,000 this year and your plan is not amended for 2017, the employee will be eligible in January 2017. Once they are eligible to contribute they are also eligible for the match for that year.

Who qualifies for a SIMPLE IRA?

All employees who received at least $5,000 in compensation from you during any 2 preceding calendar years (whether or not consecutive) and who are reasonably expected to receive at least $5,000 in compensation during the calendar year, are eligible to participate in the SIMPLE IRA plan for the calendar year.