SundanceKid Posted 6 hours ago Posted 6 hours ago We have discovered that, due to a payroll setup issue, employee deferrals to our SIMPLE IRA plan were calculated on an after-tax basis instead of a pre-tax basis from January to July 2025. Can we fix this by adjusting the remaining payrolls in 2025 to ensure each participant's total annual deferral matches their elected percentage of compensation for the remainder of the year? What would be the appropriate correction method?
justanotheradmin Posted 5 hours ago Posted 5 hours ago https://www.irs.gov/retirement-plans/simple-ira-plan-fix-it-guide-you-used-the-wrong-compensation-definition-to-calculate-deferrals-and-contribution-to-participants-simple-iras Bill Presson 1 I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
justanotheradmin Posted 5 hours ago Posted 5 hours ago very similar to this error and correction - same correction and analysis principles under EPCRS https://www.irs.gov/retirement-plans/simple-ira-plan-fix-it-guide-you-excluded-an-eligible-employee-from-participating I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
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