eilano Posted March 2, 2001 Share Posted March 2, 2001 Can an employer have a Simple IRA for 2001, decide to stop the Simple IRA during the year and then adopt a 401(k) qualified plan during 2001? Link to comment Share on other sites More sharing options...
Bill Berke Posted March 8, 2001 Share Posted March 8, 2001 No, if you want the SIMPLE contributions to be deductiible. The law is quite specific - to be valid the SIMPLE plan is the only plan permitted in any year - IRC 408(p)(2)(D). The other question is could you withdraw (pay to the employees) the SIMPLE conributions and the required employer match deposited during this year and then install a 401(k)? I don't know, but withdrawing the SIMPLE money will incur the 25% tax and income tax and who knows what else. Link to comment Share on other sites More sharing options...
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