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SIMPLE $6,000 Limit

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If a participant somehow is able to participate in 2 SIMPLE plans during a calendar year, is he or she limited to $6,000 in the aggregate, or $6,000 for each simple? I know the rules for 401(k) plans (the $10,500 limit applies to the person in the aggregate), but this is the first time I have been asked the question regarding SIMPLE's.

Any help would be appreciated. Thanks!

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  • 4 weeks later...
Guest Robin Sproles

Assuming the employers are not related, the limit is $6,000 per SIMPLE IRA plan. However, there is a $10,500 overall elective deferral limit under IRC Sec. 402(g)(3) that applies to each individual taxpayer. This limit applies to all the individual's elective deferrals made under 401(k) plans, SARSEPs, SIMPLE IRA plans, and 403(b) plans combined (even if each of these plans are sponsored by unrelated employers). Therefore, an individual cannot defer more than $10,500 to any combination of these plans.

For example, an employee who participates under two different SIMPLE IRA plans (sponsored by two different employers) could defer $6,000 to one and $4,500 to another. Any other combintation could be deferred as long as deferrals to any one SIMPLE IRA plan do not exceed $6,000 and total deferrals do not exceed $10,500.

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