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SIMPLE IRA and SIMPLE 401k Catchup Limits


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The employee contribution limits for SIMPLE IRA and SIMPLE 401k is currently - $13,000 for Employee Contributions and an additional $3,000 for employees over 50 years of age.

Does anybody know whether this limit applies individually to Simple IRA and Simple 401k or combined. Example is if the employee is over 50 and contributes to both Simple Ira and Simple 401k in the same year. Is the overall limit still $16,000?

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I don't deal with Simple plans but I don't think an Employer can maintain both a Simple IRA and a qualified plan (a Simple 401(k) plan is a qualified plan for this purpose) in the same year.  

If the employee participates in two plans  of different sponsors, then I think the overall limit is $19,000 for 2019 if under age 50 and $25,000 if they have attained age 50.  Here is what is in IRS Publication 560 under the Simple IRA information:

If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($18,500 for 2018 and $19,000 for 2019) on exclusion of salary reduction contributions and other elective deferrals.

Mike

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On 3/13/2019 at 1:54 PM, NJ Mike said:

I don't deal with Simple plans but I don't think an Employer can maintain both a Simple IRA and a qualified plan (a Simple 401(k) plan is a qualified plan for this purpose) in the same year.  

If the employee participates in two plans  of different sponsors, then I think the overall limit is $19,000 for 2019 if under age 50 and $25,000 if they have attained age 50.  Here is what is in IRS Publication 560 under the Simple IRA information:

If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($18,500 for 2018 and $19,000 for 2019) on exclusion of salary reduction contributions and other elective deferrals.

Mike

Hi Mike, I deal with SIMPLEs. You are right. ( caveat:  there are exceptions to the SIMPLE being the only plan maintained by the employer)

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

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