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Deadline for SIMPLE IRA ER contribution


Guest Carl C
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Guest Carl C

Our employer is a Sub S corporation. For FY 1999, we had a SIMPLE IRA. The Employer made a 3% contribution covering the first half of 1999, but to date has not sent in the 3% covering the last half of 1999. It is his belief that he can defer the contribution until he is ready to file his 1999 taxes, including extensions.

Is his assumption correct?

A few posts back, I saw where employers who do not make the contribution risk the employees contributions being declared as income by the IRS, which would certainly be a blow to the employees.

Carl C

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  • 5 weeks later...

And possibly being reported as taxable distributions by the distributinhg trustee or custodian. Something to explain away if it occurs. No IRS guidance issued on treating the amount as "wages," but I think it is the only action the employer could take to avoid the 10 percent penalty for nondeductible contributions.

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