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Simple ira notification to eligible employees Form: What You Should Know
If you select — ‥Partial Eligibility” as a plan feature on IRS Form 5304-SIMPLE, you must meet the following requirements before you may make a SIMPLE IRA contribution. You cannot make a SIMPLE IRA contribution if you are not enrolled in employment based coverage, or You cannot make a SIMPLE IRA contribution if you are enrolled in coverage that results in more than a 50% reduction in your actuarial value or if you have a pre-tax IRA with a modified adjusted gross income (MAGI) greater than 110,000. There are special circumstances for a full eligibility determination. For full eligibility purposes you need to: 1. Provide a copy of each notice to each employee that you plan to make SIMPLE IRA contributions to the SIMPLE IRA plan, in accordance with the notice and the plan description on the plan. 2. Provide a certified copy of the plan and, if the plan covers employees based in a state that permits qualified retirement plans and there are more than three employees in the plan, a copy of your state's laws. 3. Provide an IRS Form 5304-SIMPLE to each employee stating that the company will make tax qualified contribution to the plan. 4. Provide a letter to the IRS signed by each employee that the employee is eligible for the tax deduction. 5. Make sure that each employee can verify that the employee has read and understands the plan's plan description. In addition, the letter, letter by the IRS, or copy of the plan should provide each employee the names of those employees that can qualify to make a tax-deductible contribution to the plan, and the amount of each contribution that will be made. The plan can be used for all or part of a calendar year. 6. Make sure that you have enough SIMPLE IRA contributions for each employee to reach the following contributions limits: For calendar year 2023 and prior years: Contributions Required for each Employee: For 2: 6,500 and each employee can contribute up to 3,500 6. For calendar year 2023 and subsequent years: Contributions Required for each Employee: Contributions Required for each Employee: 6,500 and each employee can contribute up to 3,500 7.
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