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Can SIMPLE IRA suspend match

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What options does the sponsor of SIMPLE plan have if they can''t afford to make the require employer contribution? 

It's my understanding unlike a SH 401(k) a SIMPLE contribution can't be reduced suspend mid-plan year. In addition, a simple can't be terminate mid year

My suspicion is this situation will come up frequently due to the havoc COVID-19 is having on businesses; particularly small businesses. 

Thank you

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8 hours ago, cardinalwealth said:

*I was going to type in the exact same question as Joe; we have a client that was at least wondering if perhaps the employer/match contributions can be pushed to July 15. 

An employer always has until their tax filing deadline including extensions to make employer contributions.

If your client is a taxpayer normally with a 4/15 tax filing deadline, the tax filing deadline has been postponed until 7/15 and they would have until 7/15 to make employer contributions. Also, as always they can delay that contribution until 10/15 by filing for an extension.

If the client is not a taxpayer normally with a 4/15 tax filing deadline, the tax filing deadline has not been postponed. However, as always they can delay that contribution for up to six (6) months after their tax filing deadline by filing for an extension.

For the OP, I am not aware of any CARES Act provision that would allow the suspension of SIMPLE IRA employer contributions.


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I did find this on the IRS website: (I suspect spiritrider eluded to it) You must make matching and nonelective contributions to the financial institution maintaining the SIMPLE IRA no later than the due date for filing your business's income tax return, including extensions, for the taxable year that includes the last day of the calendar year for which you made the contributions. If you extend your tax return, then you have until the end of that extension period to deposit contributions, regardless of when you file the tax return. However, if you did not deposit the contribution timely, you must amend the tax return and pay any tax, interest and penalties that may apply.

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  • 2 weeks later...

My guess is that the OP was regarding suspending 2020 matching contributions. I don't think so under current law, but I suppose it is possible that there will be relief in a future bill. Of course, you can reduce for 2021. See https://www.irs.gov/retirement-plans/simple-ira-plan-faqs-contributions

Termination would not get you out of requirement under current law either: https://www.irs.gov/retirement-plans/terminating-a-simple-ira-plan


Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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