Match in first year of SIMPLE IRA?

[Guest Labradane]

If an employer establishes a SIMPLE IRA on October 1, must it match salary deferrals (up to the 3% limit) for the whole year? Seen any IRS guidance on this?

[Lame Duck]

According to Q14:65 of the SIMPLE, SEP and SARSEP Answer Book, "IRS Guidance now provides that the nonelective and matching contributions are based on compensation for the entire year." It cites Notice 98-4, IRC Sections 401(a)(17) and 408(p)(6)(A), and Tres Reg Section 1.401(a)(17)-1(b)(3)(iii)(A). (Please note that my version of the Answer Book is the sixth Edition, published in 2000. There may be further guidance since then.) Gary Lesser should be able to give you more definitive guidance. [No change in answer. Is Q 14:66 in 8th ed; 14:65 in 9th ed.--gsl]