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W-2 Box 13


Guest Dion
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The company has a Simple IRA plan with only 10 employees. It elected non-matching 2% contributions. Two eligible employees had elected not to defer income. The only contribution is the 2% by the employer into their Simple accounts. Do you mark Box 13 "retirement plan" even if they do not participate since they receive a contribution from the employer? The instructions say to mark the checkbox if employee was an "active participant" but it does not define active. I can not find an answer. Does anyone know the answer? Thanks.

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I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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For SEP IRAs, an employee is considered to be an active participant, if he/she makes a deferral contribution and/or receives an employer contribution. IRC 219(g)(5)(A)(v)

It would appear then that the same rules applies to SIMPLE IRAs. IRC § 219(g)(5)(A)(vi).

Thus an employee who receives any type of employer contribution to a SIMPLE IRA , matching or non-elective, is considered to be active.

We could also use the logic for define contirbutions plans, which for this purpose, may include SIMPLEs and SEPs

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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This a great site. Thank you for the information. I reviewed the prior discussions and searched for 219 on the IRS site. I found the below on the IRS website:

http://www.irs.gov/prod/tax_edu/faq/faq5.html

IRS FAQ-Pensions and Annuities

"Am I considered covered by an employer sponsored retirement plan for the year if I do not participate in the plan or if I did not work long enough to be vested?

The answer to this question depends on your type of retirement plan. If your employer's plan has a separate account for each employee and any amount was contributed or allocated by you or your employer to your account, you are considered covered. This is called a defined contribution plan. With this type of plan, it does not matter if you have worked long enough to be vested."

Based on all of the information I read, the box should be checked for the employees who did not defer their income but did receive a contribution from the employer. A SIMPLE IRA account has separate accounts for each employee. Thanks again

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OK, so if the SIMPLE IRA offers the 3% match, and the employee chooses not to defer in 2001, then box 13 should not be checked? And this will be the same for the SIMPLE 401(k)? And this will be the same even if the employee met the eligibility requirements and made deferrals in 2000 and in 2002, but skipped 2001? And whether this box is checked is one of the things that determines how much of your traditional IRA contribution for 2001 is deductible?

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For 401(k) plans, which the only contributions made are deferral and matching contributions, an employee who is eligible to make an elective deferral contribution and chooses not to do so is not considered an active participant. This rule would also apply to the SIMPLE plan

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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