SIMPLE and Qualified Plan

[Randy Watson]

Employer made contributions to a SIMPLE and a qualified plan last year. This was the only year in which contributions were made to the SIMPLE. What exactly happens to the SIMPLE plan now that there was a violation of the exclusive plan rule? Can distribution of those amounts be made now or must they stay in the SIMPLE until a distribution event? Must the employees recognize the amounts in income even if the contributions have to stay in the plan?

[Gary Lesser]

This has been answered in other posts. All SIMPLE contributions are exccess contributions. Generally reported in box 1 of Form W-2.