Corporate officer receiving no salary included in SIMPLE?

[Guest Steven Hoksch]

A client owns a small C corporation and his wife is the corporate treasurer but does not draw a salary. She has authority to sign checks, provides advice similar to director duties, and does other miscellaneous activities for the business. The owner wants to install a SIMPLE IRA for the company. His wife does not meet the $5000 salary minimum, but her duties certainly qualify for salary. Does she need to start drawing a salary and be included in the SIMPLE or can she continue to work for nothing?

[Gary Lesser]

Try to think this through. If she has no salary she has nothing to defer. The plan cd lower its eligibility requirments, but then again, she has nothing to defer. Clearly, she needs some wages or salary. That being said, is she reporting any income from her services (for her noncash benefits) - those may qualify (and probably be subject to FICA & FUTA too).