2 companies - Simple IRA Offering?

[Doogan]

Hi everyone 

I have 2 companies. 

Company A has existing for some time, I offered a simple IRA out for year 2020

Company B was formed in 2019 (Different state). 

An employee of company A, who has worked with me full time for many years resigned in 2018. Employee came back to company A in mid 2019, and when I opened Company B, employee relocated to the state Company B located in and came on board full time as an employee of company B in 11/2019

Should I be offering this employee the opportunity to participate in a simple IRA, given that employee was working for one of my companies making over 5K for multiple years.  

Or, should this be kept separated and wait for the 2 years period etc?

I own both entities, Company A, 50% with my wife and the company B 100%

I have no problem offering it out, and making up any discrepancy over the past 2 months if needed. Just want to to whats right

 

thanks

[Bill Presson]

Not quite enough info to be sure, but it is highly likely that the two companies constitute a controlled group. A SIMPLE IRA is required to cover all members of the controlled group. So when you offered the SIMPLE IRA, it should have been to everyone.

[Doogan]

Hi Bill, 

Thanks for your reply. What additional information would be needed to be sure? Glad to provide I assume I would have to open a separate Simple IRA account under the  second company, and have the employee open her account there?

[Bill Presson]

On 4/10/2020 at 3:06 PM, Doogan said:

Hi Bill, 

Thanks for your reply. What additional information would be needed to be sure? Glad to provide I assume I would have to open a separate Simple IRA account under the  second company, and have the employee open her account there?

That's where we go from free guidance to needing to be hired. We don't work on SIMPLE plans as a general rule. But you need to find someone that does and pay them for their advice.