Compensation for match

[k man]

I have read conflicting items as to the proper definition of compensation for determining the match in a SIMPLE plan. Is it the 401(a)(17) definition or something else?

[R. Butler]

For SIMPLE IRA's compensation is defined in 6051(a)(3). Basically it is compensation subject to withholding under 3401(a). Compensation does include salary deferrals under the plan.

If employer uses a nonelective contribution the 401(a)(17) limit does apply. If the employer uses the match 401(a) (17) does not apply.